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What changed in Janux Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Janux Therapeutics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+746 added−701 removedSource: 10-K (2025-02-27) vs 10-K (2024-03-08)

Top changes in Janux Therapeutics, Inc.'s 2024 10-K

746 paragraphs added · 701 removed · 573 edited across 3 sections

Item 1. Business

Business — how the company describes what it does

383 edited+94 added−84 removed869 unchanged
Biggest changeWe may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Biggest changeIf a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other foreign regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. 53 Table of Contents We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data for JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.
TCEs developed using other platforms not designed for tumor-specific activation have resulted in clinical holds and dose-limiting toxicities resulting from target expression in healthy tissues. • Short half-lives. TCEs quickly reach sub-therapeutic levels after being administered as they are quickly eliminated from the body due to their short exposure half-lives.
TCEs developed using other platforms not designed for tumor-specific activation have resulted in clinical holds and dose-limiting toxicities resulting from target expression in healthy tissues. • Short half-lives. TCEs quickly reach sub-therapeutic levels after being administered as they are quickly eliminated from the body due to their short exposure half-lives.
We designed our TRACTrs and TRACIrs with an albumin-binding domain to be stable in the bloodstream and to have an extended serum half-life before activation. Our TRACTrs and TRACIrs have demonstrated long half-lives in NHPs.
We designed our TRACTrs and TRACIrs with an albumin-binding domain to be stable in the bloodstream and to have an extended serum half-life before activation. Our TRACTrs and TRACIrs have demonstrated long half-lives in NHPs.
In preclinical studies, our TRACTrs and TRACIrs did not require high levels of tumor target expression to activate T cells to kill cancer cells. • Modularity.
In preclinical studies, our TRACTrs and TRACIrs did not require high levels of tumor target expression to activate T cells to kill cancer cells. • Modularity.
Our TRACTr and TRACIr platforms’ modular characteristics enable us to leverage the learnings from the development of our product candidates to progress the discovery process of new TRACTr and TRACIr candidates against a wide variety of targets. • Manufacturability.
Our TRACTr and TRACIr platforms’ modular characteristics enable us to leverage the learnings from the development of our product candidates to progress the discovery process of new TRACTr and TRACIr candidates against a wide variety of targets. • Manufacturability.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data for JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs. Safety and efficacy data As of February 12, 2024, 11 heavily pre-treated, late-stage subjects across all four tumor types have been enrolled.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data for JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs. Safety and efficacy data As of February 12, 2024, 11 heavily pre-treated, late-stage subjects across all four tumor types have been enrolled.
Our third-party manufacturers are qualified to manufacture our product candidates under cGMP requirements and other applicable laws, guidance and regulations. We believe there are multiple sources for all of the materials and components required for the manufacture of our product candidates.
Our third-party manufacturers are qualified to manufacture our product candidates under cGMP requirements and other applicable laws, guidance and regulations. We believe there are multiple sources for all the materials and components required for the manufacture of our product candidates.
All of our TRACTrs and TRACIrs are and will continue to be manufactured from a vial of a master cell bank or working cell bank of that biologic therapeutic’s production cell line.
All our TRACTrs and TRACIrs are and will continue to be manufactured from a vial of a master cell bank or working cell bank of that biologic therapeutic’s production cell line.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites, and enrolling subjects for any future clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, and enrolling subjects for any future clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
Conditions for exclusivity include the FDA’s determination that information relating to the use of a new biologic in the pediatric population may produce health benefits in that population, FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.
Conditions for exclusivity include the FDA’s determination that information relating to the use of a new biologic in the pediatric population may produce health benefits in that population, the FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.
Based upon our current operating plan, we estimate that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months following the date of this Annual Report.
Based upon our current operating plan, we estimate that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months following the date of this Annual Report.
The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.
The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.
However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.
However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.
The key competitive factors affecting the success of all of our programs are likely to be efficacy, safety, and convenience. If we are not successful in developing, commercializing and achieving higher levels of reimbursement than our competitors, we will not be able to compete against them and our business would be materially harmed.
The key competitive factors affecting the success of all of our programs are likely to be efficacy, safety, and convenience. If we are not successful in developing, commercializing and achieving higher levels of reimbursement than our competitors, we will not be able to compete against them and our business would be materially harmed.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
The process generally involves the following: 35 • completion of extensive preclinical laboratory and animal studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (GLP) requirements; • submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin; • approval by an institutional review board (IRB) or independent ethics committee at each clinical trial site before each clinical trial may be commenced; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (GCP) requirements and other regulations to establish the safety and efficacy of the investigational product for each proposed indication; • submission to the FDA of a BLA; • payment of any user fees for FDA review of the BLA; • a determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review; • satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the biologic, or components thereof, will be produced to assess compliance with current good manufacturing processes (cGMP) requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the BLA to assure compliance with GCPs and integrity of the clinical data; • FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee; and • compliance with any post-approval requirements, including REMS, where applicable, and post- approval studies required by the FDA as a condition of approval.
The process generally involves the following: • completion of extensive preclinical laboratory and animal studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (GLP) requirements; • submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin; • approval by an institutional review board (IRB) or independent ethics committee at each clinical trial site before each clinical trial may be commenced; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (GCP) requirements and other regulations to establish the safety and efficacy of the investigational product for each proposed indication; • submission to the FDA of a BLA; • payment of any user fees for FDA review of the BLA; • a determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review; • satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the biologic, or components thereof, will be produced to assess compliance with current good manufacturing processes (cGMP) requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the BLA to assure compliance with GCPs and integrity of the clinical data; • FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee; and • compliance with any post-approval requirements, including REMS, where applicable, and post- approval studies required by the FDA as a condition of approval.
In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • In addition, HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. 80 • the U.S.
In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • In addition, HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. • the U.S.
Because of the early stage of development of our products candidates, our ability to eventually generate significant revenues from product sales will depend on a number of factors, including: • completion of additional preclinical studies with favorable results; • acceptance of INDs by the FDA or similar regulatory filing with comparable foreign regulatory authorities for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials; • successful enrollment in, and completion of, clinical trials and achieving positive results from the trials; • demonstrating a risk-benefit profile acceptable to regulatory authorities; 56 • receipt of marketing approvals from applicable regulatory authorities, including biologics license applications (BLAs), from the FDA and equivalent approvals from comparable foreign regulatory authorities and maintaining such approvals; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities for clinical supply and, if and when approved, for commercial supply; • establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in combination with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other therapies; • obtaining and maintaining third-party coverage and adequate reimbursement; • obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; and • maintaining a continued acceptable safety profile of any product following approval, if any.
Because of the early stage of development of our products candidates, our ability to eventually generate significant revenues from product sales will depend on a number of factors, including: • completion of additional preclinical studies with favorable results; • acceptance of INDs by the FDA or similar regulatory filing with comparable foreign regulatory authorities for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials; • successful enrollment in, and completion of, clinical trials and achieving positive results from the trials; • demonstrating a risk-benefit profile acceptable to regulatory authorities; • receipt of marketing approvals from applicable regulatory authorities, including biologics license applications (BLAs), from the FDA and equivalent approvals from comparable foreign regulatory authorities and maintaining such approvals; • making arrangements with third-party manufacturers, or establishing manufacturing capabilities for clinical supply and, if and when approved, for commercial supply; • establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in combination with others; • acceptance of our products, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other therapies; • obtaining and maintaining third-party coverage and adequate reimbursement; • obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; and • maintaining a continued acceptable safety profile of any product following approval, if any.
Clinical trials can be delayed or terminated for a variety of reasons, including delay or failure related to: 57 • the FDA, the EMA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials, or the sufficiency of preclinical data to initiate clinical trials; • the size of the study population for further analysis of the study’s primary endpoints; • obtaining regulatory approval to commence a trial; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining IRB approval or ethics committee positive opinions; • recruiting suitable patients to participate in a trial; • having patients complete a trial or return for post-treatment follow-up; • addressing patient safety concerns that arise during the course of a trial; • addressing any conflicts with new or existing laws or regulations; • adding a sufficient number of clinical trial sites; or • manufacturing sufficient quantities of product candidate for use in clinical trials.
Clinical trials can be delayed or terminated for a variety of reasons, including delay or failure related to: • the FDA, the EMA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials, or the sufficiency of preclinical data to initiate clinical trials; • the size of the study population for further analysis of the study’s primary endpoints; • obtaining regulatory approval to commence a trial; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining IRB approval or ethics committee positive opinions; • recruiting suitable patients to participate in a trial; • having patients complete a trial or return for post-treatment follow-up; • addressing patient safety concerns that arise during the course of a trial; • addressing any conflicts with new or existing laws or regulations; • adding a sufficient number of clinical trial sites; or • manufacturing sufficient quantities of product candidate for use in clinical trials.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or 101 former directors, officers, or other employees to us or our stockholders; (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers, or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; (iv) any action or proceeding to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws; (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and (vi) any action asserting a claim against us or any of our directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, or other employees to us or our stockholders; (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers, or other employees, arising out of or pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; (iv) any action or proceeding to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws; (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and (vi) any action asserting a claim against us or any of our directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
A comprehensive discussion on risks relating to intellectual property is provided under the section of this Annual Report titled “Risk Factors—Risks Related to Our Intellectual Property.” Government Regulation Government authorities in the United States at the federal, state and local level and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of drug and biological products, such as our investigational medicines and any future investigational medicines.
A comprehensive discussion on risks relating to intellectual property is provided under the section of this Annual Report titled “Risk Factors—Risks Related to Our Intellectual Property.” Government Regulation Government authorities in the United States at the federal, state and local level and in other countries and jurisdictions, including the European Union (EU), extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of drug and biological products, such as our investigational medicines and any future investigational medicines.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; 59 • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
If serious adverse or unexpected side effects are identified during development or after approval and are determined to be attributed to our product candidate, we may be required to develop a Risk Evaluation and Mitigation Strategy (REMS) or equivalent foreign procedure to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.
If serious adverse or unexpected side effects are identified during development or after approval and are determined to be attributed to our product candidate, we may be required to develop a Risk Evaluation and Mitigation Strategy (REMS), a Risk Management Plan, or equivalent foreign procedure to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; 90 • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the creation or use of licensed intellectual property by us alone or with our licensors and partners; • the right to control prosecution, maintenance, enforcement, and defense of the licensed patents and improvements thereof; • the scope and duration of our payment obligations; and • the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the creation or use of licensed intellectual property by us alone or with our licensors and partners; • the right to control prosecution, maintenance, enforcement, and defense of the licensed patents and improvements thereof; • the scope and duration of our payment obligations; and • the priority of invention of patented technology.
These obligations may include limiting personal information processing to only what is necessary for specified, explicit, and legitimate purposes; requiring a legal basis for personal information processing; requiring the appointment of a data protection officer in certain circumstances; increasing 45 transparency obligations to data subjects; requiring data protection impact assessments in certain circumstances; limiting the collection and retention of personal information; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal information; mandating notice of certain personal information breaches to the relevant supervisory authority(ies) and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
These obligations may include limiting personal information processing to only what is necessary for specified, explicit, and legitimate purposes; requiring a legal basis for personal information processing; requiring the appointment of a data protection officer in certain circumstances; increasing transparency obligations to data subjects; requiring data protection impact assessments in certain circumstances; limiting the collection and retention of personal information; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal information; mandating notice of certain personal information breaches to the relevant supervisory authority(ies) and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
Factors that may inhibit our efforts to commercialize future products on our own include: • our inability to recruit and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians on the benefits of prescribing any future products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product portfolios; and 72 • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Factors that may inhibit our efforts to commercialize future products on our own include: • our inability to recruit and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians on the benefits of prescribing any future products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product portfolios; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
There is also a risk that, even if the validity of such patents is upheld, the court will construe the 93 patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention, or decide that the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1).
There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention, or decide that the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1).
Federal Food, Drug and Cosmetic Act, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; • the U.S. federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the Affordable Care Act, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physicians assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; • analogous state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including, but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws requiring the registration of pharmaceutical sales representatives; and • European Union and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to healthcare providers.
Federal Food, Drug and Cosmetic Act, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; • the U.S. federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the Affordable Care Act, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physicians assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; 68 Table of Contents • analogous state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including, but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws requiring the registration of pharmaceutical sales representatives; and • European Union and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to healthcare providers.
By engineering our TRACTrs and TRACIrs with novel peptide masks that are designed (i) to be selectively activated in the tumor microenvironment and (ii) for any activated TCEs or non-TCE based immunomodulators to be rapidly cleared from healthy tissue upon escaping from the tumor, our product candidates have the potential to 4 overcome the toxicity challenges of TCEs, non-TCE based immunomodulators and systemic immunotherapies in general. • Potential for extended half-life of our TRACTrs and TRACIrs.
By engineering our TRACTrs and TRACIrs with novel peptide masks that are designed (i) to be selectively activated in the tumor microenvironment and (ii) for any activated TCEs or non-TCE based immunomodulators to be rapidly cleared from healthy tissue upon escaping from the tumor, our product candidates have the potential to overcome the toxicity challenges of TCEs, non-TCE based immunomodulators and systemic immunotherapies in general. • Potential for extended half-life of our TRACTrs and TRACIrs.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the 38 United States, or more than 200,000 individuals in the United States but for which there is no reasonable expectation that the cost of developing and making the product for this type of disease or condition will be recovered from sales of the product in the United States.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States but for which there is no reasonable expectation that the cost of developing and making the product for this type of disease or condition will be recovered from sales of the product in the United States.
The FDA may also require a REMS and the European Commission, or comparable foreign regulatory authorities may require equivalent actions as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA may also require a REMS and the European Commission, or comparable foreign regulatory authorities may require Risk Management Plans or equivalent actions as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business 100 combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders.
Severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
Severe ransomware attacks are increasingly prevalent and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
Our future capital requirements will depend on many factors, including: • the initiation, trial design, progress, timing, costs and results of drug discovery, preclinical studies and clinical trials of our product candidates, and in particular the clinical trials for JANX007 and JANX008; • the number and characteristics of clinical programs that we pursue; • the outcome, timing and costs of seeking FDA, European Commission and any other comparable regulatory approvals for any future drug candidates; • the costs of manufacturing our product candidates; • the costs associated with hiring additional personnel and consultants as our preclinical, manufacturing and clinical activities increase; • the receipt of marketing approval and revenue received from any commercial sales of any of our product candidates, if approved; • the cost of commercialization activities for any of our product candidates, if approved, including marketing, sales and distribution costs; • the ability to establish and maintain strategic collaboration, licensing or other arrangements and the financial terms of such agreements; • the extent to which we in-license or acquire other products and technologies; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • our implementation of additional internal systems and infrastructure, including operational, financial and management information systems; • our costs associated with expanding our facilities or building out our laboratory space; • the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions, including COVID-19, the military conflict in Ukraine and Russia, the war in the Middle East and bank failures; and • the costs of operating as a public company.
Our future capital requirements will depend on many factors, including: • the initiation, trial design, progress, timing, costs and results of drug discovery, preclinical studies and clinical trials of our product candidates and, in particular, the clinical trials for JANX007 and JANX008; • the number and characteristics of clinical programs that we pursue; • the outcome, timing and costs of seeking FDA, European Commission and any other comparable regulatory approvals for any future drug candidates; • the costs of manufacturing our product candidates; • the costs associated with hiring additional personnel and consultants as our preclinical, manufacturing and clinical activities increase; • the receipt of marketing approval and revenue received from any commercial sales of any of our product candidates, if approved; • the cost of commercialization activities for any of our product candidates, if approved, including marketing, sales and distribution costs; • the ability to establish and maintain strategic collaboration, licensing or other arrangements and the financial terms of such agreements; • the extent to which we in-license or acquire other products and technologies; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • our implementation of additional internal systems and infrastructure, including operational, financial and management information systems; • our costs associated with expanding our facilities or building out our laboratory space; • the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions, including the military conflict in Ukraine and Russia, the war in the Middle East, epidemics and bank failures; and • the costs of operating as a public company.
Our PSMA-TRACTr had a half-life of 119 hours in NHPs In this same study, dosing our PSMA-TRACTr at 87µg/kg resulted in minimal levels of inflammatory cytokine production relative to an unmasked PSMA-TCE at 10µg/kg, which led to a greater than 130-fold 21 expression of IL-6 as shown in the figure below.
Our PSMA-TRACTr had a half-life of 119 hours in NHPs In this same study, dosing our PSMA-TRACTr at 87µg/kg resulted in minimal levels of inflammatory cytokine production relative to an unmasked PSMA-TCE at 10µg/kg, which led to a greater than 130-fold expression of IL-6 as shown in the figure below.
We believe that the most advanced candidates are those being developed by Amgen/CytomX, AstraZeneca/Fusion, Bristol Myers Squibb, Dragonfly, Lava Therapeutics/Pfizer, Merus, Regeneron, Chugai/Roche, and Takeda. With respect to our CD28 TRACIr platform, we are aware of other CD28-based multispecifics that are in clinical development for solid tumors.
We believe that the most advanced candidates are those being developed by Amgen/CytomX, AstraZeneca, Bristol Myers Squibb, Dragonfly, Lava Therapeutics/Pfizer, Merus, Regeneron, Chugai/Roche, and Takeda. With respect to our CD28 TRACIr platform, we are aware of other CD28-based multispecifics that are in clinical development for solid tumors.
Even if we obtain marketing approval for any of our product candidates, there is no assurance that we or our manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA or other comparable foreign regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential commercial launch of the product or to meet potential future demand.
Even if we obtain marketing approval for any of our product candidates, there is no assurance that we or our manufacturers will be able to manufacture the approved product to specifications acceptable to the FDA, the EMA or other comparable foreign regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential commercial launch of the product or to meet potential future demand.
We granted Merck an exclusive, worldwide, royalty-bearing, sublicensable license to certain of our patent rights and know-how with respect to the Collaboration Targets, in each case once designated by Merck, to research, develop, make, have made, use, import, offer to sell, and sell compounds and any licensed 32 products related thereto.
We granted Merck an exclusive, worldwide, royalty-bearing, sublicensable license to certain of our patent rights and know-how with respect to the Collaboration Targets, in each case once designated by Merck, to research, develop, make, have made, use, import, offer to sell, and sell compounds and any licensed products related thereto.
We may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Pharmaceutical Coverage, Pricing and Reimbursement 50 The availability and extent of coverage and adequate reimbursement by governmental and private third-party payors are essential for most patients to be able to afford expensive medical treatments.
We may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Pharmaceutical Coverage, Pricing and Reimbursement The availability and extent of coverage and adequate reimbursement by governmental and private third-party payors are essential for most patients to be able to afford expensive medical treatments.
Health Technology Assessment, or HTA, of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
Health Technology Assessment (HTA) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
These current or future laws and regulations may impair our research and development. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 107 We may not be able to protect our intellectual property rights throughout the world. Patent protection is available on a national or regional level.
These current or future laws and regulations may impair our research and development. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. We may not be able to protect our intellectual property rights throughout the world. Patent protection is available on a national or regional level.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own or may exclusively license; • we or licensors or collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or licensors or collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that directed to our product candidates or uses thereof in the United States or in other foreign countries; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates; • the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; • if enforced, a court may not hold that our patents are valid, enforceable and infringed; 89 • we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent application covering such intellectual property; • we may fail to adequately protect and police our trademarks and trade secrets; and • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own or may exclusively license; • we or licensors or collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or licensors or collaborators might not have been the first to file patent applications covering certain aspects of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; 76 Table of Contents • it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • we cannot predict the scope of protection of any patent issuing based on our patent applications, including whether the patent applications that we own or in-license will result in issued patents with claims that directed to our product candidates or uses thereof in the United States or in other foreign countries; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; • countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates; • the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; • if enforced, a court may not hold that our patents are valid, enforceable and infringed; • we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent application covering such intellectual property; • we may fail to adequately protect and police our trademarks and trade secrets; and • the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications.
While no on-target healthy tissue toxicity was reported, treatment-emergent increases in alanine‌ 19 aminotransferase and aspartate aminotransferase did occur, and over half of patients in this trial developed Grade 3 or Grade 4 drug-related SAEs. Three patients dosed with continuous infusion developed CRS; two were Grade 2 and one was Grade 3.
While no on-target healthy tissue toxicity was reported, treatment-emergent increases in alanine‌ aminotransferase and aspartate aminotransferase did occur, and over half of patients in this trial developed Grade 3 or Grade 4 drug-related SAEs. Three patients dosed with continuous infusion developed CRS; two were Grade 2 and one was Grade 3.
The CHMP is required to issue an opinion within 210 days of receipt of a valid application, though the clock is stopped if it is necessary to ask the applicant for 42 clarification or further supporting data. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts.
The CHMP is required to issue an opinion within 210 days of receipt of a valid application, though the clock is stopped if it is necessary to ask the applicant for clarification or further supporting data. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts.
Further, new therapies may change the estimated incidence or prevalence of the cancers that we are targeting. Consequently, even if our product candidates are approved for a second or third line of therapy, the number of patients who may be eligible for treatment with our product candidates may turn out to be much lower than 71 expected.
Further, new therapies may change the estimated incidence or prevalence of the cancers that we are targeting. Consequently, even if our product candidates are approved for a second or third line of therapy, the number of patients who may be eligible for treatment with our product candidates may turn out to be much lower than expected.
Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic products. As a result, our patent portfolio may 97 not provide us with sufficient rights to exclude others from commercializing product candidates similar or identical to ours.
Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic products. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing product candidates similar or identical to ours.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. 55 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
The development, research, testing, manufacturing, labeling, approval, selling, import, export, marketing, promotion and distribution of drug products are subject to extensive and evolving regulation by federal, state and 61 local governmental authorities in the United States, principally the FDA, and by foreign regulatory authorities, which regulations may differ from country to country.
The development, research, testing, manufacturing, labeling, approval, selling, import, export, marketing, promotion and distribution of drug products are subject to extensive and evolving regulation by federal, state and local governmental authorities in the United States, principally the FDA, and by foreign regulatory authorities, which regulations may differ from country to country.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own 70 preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.
An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and 87 products.
An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.
The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as 108 limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
We plan to selectively consider other strategic collaboration opportunities in the future. Our Strategy Our goal is to unleash the potential of our TRACTr and TRACIr platforms technology to transform the lives of cancer patients. To achieve this goal, critical elements of our strategy include the following: 7 • Advance our lead TRACTr programs through clinical development.
We plan to selectively consider other strategic collaboration opportunities in the future. Our Strategy Our goal is to unleash the potential of our TRACTr and TRACIr platforms technology to transform the lives of cancer patients. To achieve this goal, critical elements of our strategy include the following: • Advance our lead TRACTr programs through clinical development.
Our product candidates are based on novel technologies, which make it difficult to predict the timing, results and cost of product candidate development and likelihood of obtaining regulatory approval. 58 We have concentrated our research and development efforts on product candidates using our proprietary technology, and our future success depends on the successful development of this approach.
Our product candidates are based on novel technologies, which make it difficult to predict the timing, results and cost of product candidate development and likelihood of obtaining regulatory approval. We have concentrated our research and development efforts on product candidates using our proprietary technology, and our future success depends on the successful development of this approach.
If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and 91 our competitors could market competing products and technology.
If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology.
The pharmaceutical and biotechnology industries have produced a considerable number of patents, and it may not always be clear to industry 92 participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
The pharmaceutical and biotechnology industries have produced a considerable number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates We are early in our development efforts and all of our product candidates and research programs other than JANX007 and JANX008 are in the preclinical development or discovery stage. We have a very limited history of conducting clinical trials to test our product candidates in humans.
Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates We are early in our development efforts and all of our product candidates and research programs other than JANX007 and JANX008 are in the preclinical development or discovery stage. We have a limited history of conducting clinical trials to test our product candidates in humans.
There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy 104 may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
However, the actual protection afforded by a patent varies on a 34 product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its claims, the availability of regulatory-related extensions, the availability of legal remedies in a particular country, and the validity and enforceability of the patent.
However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its claims, the availability of regulatory-related extensions, the availability of legal remedies in a particular country, and the validity and enforceability of the patent.
However, despite the availability of these therapies, very few patients are cured of their disease, and the prognosis in NSCLC remains poor.‌ Renal cell carcinoma overview Renal cell carcinoma, or kidney cancer, is a disease in which malignant cells are found in the lining of tubules in the kidney.
However, despite the availability of these therapies, very few patients are cured of their disease, and the prognosis in NSCLC remains poor.‌ Renal cell carcinoma overview Renal cell carcinoma (RCC), or kidney cancer, is a disease in which malignant cells are found in the lining of tubules in the kidney.
European Union member states may 51 approve a specific price for a product, may adopt a system of direct or indirect controls on the profitability of the company placing the product on the market or monitor and control prescription volumes and issue guidance to physicians to limit prescriptions.
European Union member states may approve a specific price for a product, may adopt a system of direct or indirect controls on the profitability of the company placing the product on the market or monitor and control prescription volumes and issue guidance to physicians to limit prescriptions.
Comparable foreign regulatory authorities may require compliance with similar requirements. The facilities and quality systems of our third-party contract 66 manufacturers must pass a pre-approval inspection for compliance with the applicable regulations as a condition of marketing approval of our product candidates.
Comparable foreign regulatory authorities may require compliance with similar requirements. The facilities and quality systems of our third-party contract manufacturers must pass a pre-approval inspection for compliance with the applicable regulations as a condition of marketing approval of our product candidates.
Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products. We are currently party to an in-license agreement under which we were granted rights to manufacture certain components of our product candidates.
Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products. We are currently a party to an in-license agreement under which we were granted rights to manufacture certain components of our product candidates.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. • In addition, HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. • The federal transparency requirements under the Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act (the Affordable Care Act), which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physicians assistants or nurse practitioners), and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members. • Analogous state and foreign anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or that apply regardless of payor; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government; state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws that 47 require the reporting of information related to drug pricing; state and local laws requiring the registration of pharmaceutical sales representatives.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. • In addition, HIPAA, as amended by Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. • The federal transparency requirements under the Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act (the Affordable Care Act), which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physicians assistants or nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members. • Analogous state and foreign anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or that apply regardless of payor; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government; state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws that require the reporting of information related to drug pricing; state and local laws requiring the registration of pharmaceutical sales representatives.
The value to employees of stock options that vest over time may be 76 significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.
The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.
One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is 88 deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.
One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.
Furthermore, each clinical trial must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in 36 the clinical trials are minimized and are reasonable in relation to anticipated benefits.
Furthermore, each clinical trial must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
Companies may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling. 40 Adverse event reporting and submission of periodic safety summary reports is required following FDA approval of a BLA.
Companies may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling. Adverse event reporting and submission of periodic safety summary reports is required following FDA approval of a BLA.
An inability or material limitation on our ability to transfer personal data to the United States or other countries could materially impact our business operations. 85 In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.
An inability or material limitation on our ability to transfer personal data to the United States or other countries could materially impact our business operations. In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.
If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
We are also generating a 3 number of unnamed TRACTr and TRACIr programs for potential future development, some of which are at development candidate stage or later. We are currently assessing priorities in our preclinical pipeline.
We are also generating a number of unnamed TRACTr and TRACIr programs for potential future development, some of which are at development candidate stage or later. We are currently assessing priorities in our preclinical pipeline.
The use of single agent anti-VEGF TKI’s such as sunitinib is declining due to data from the checkpoint combinations, however usage still remains as an option in the more favorable risk patients.
The use of single agent anti-VEGF TKI’s such as sunitinib is declining due to data from the checkpoint combinations, however usage remains as an option in the more favorable risk patients.
In addition, the Federal circuit recently issued a decision involving the interaction of patent term adjustment (PTA), terminal disclaimers, and obvious-type double patenting. Depending on future actions by the U.S.
In addition, the Federal Circuit issued a decision involving the interaction of patent term adjustment (PTA), terminal disclaimers, and obvious-type double patenting. Depending on future actions by the U.S.
As a result, our collaborators may elect to de-prioritize our programs, change their strategic focus or pursue alternative 73 technologies in a manner that results in reduced, delayed or no revenue to us.
As a result, our collaborators may elect to de-prioritize our programs, change their strategic focus or pursue alternative technologies in a manner that results in reduced, delayed or no revenue to us.
We cannot be certain that our 96 trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
We cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.
The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product designation, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.
There is a risk that our product candidates may induce adverse events. If we cannot successfully 75 defend against product liability claims, we could incur substantial liability and costs.
There is a risk that our product candidates may induce adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs.
After the protein A affinity chromatography step, TRACTrs and TRACIrs are further purified and polished using standard ion exchange, hydrophobic-interaction and/or multi-modal chromatography, virus filtration, and ultrafiltration/diafiltration formulation steps. Our dosing strategy gives us the advantage of manufacturing at relatively modest scale and formulating our drug products at low protein concentrations in typical formulation matrices.
After the protein A affinity chromatography step, TRACTrs and TRACIrs are further purified and polished using standard ion exchange, hydrophobic-interaction and/or multi-modal chromatography, virus filtration, and ultrafiltration/diafiltration formulation steps. Our dosing strategy gives us the advantage of manufacturing at relatively modest scale and formulating our drug products at tolerable protein concentrations in typical formulation matrices.
The PIP sets out the timing and measures proposed to 43 generate data to support a pediatric indication of the medicinal product for which MA is being sought.
The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the medicinal product for which MA is being sought.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDepending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example, our incident response policy; incident detection and response processes; a vulnerability management policy; a disaster recovery plans; risk assessments; encrypting certain data; network security controls; segregating certain of our data; maintaining access and physical controls; asset management, tracking and disposal; systems monitoring; employee training; penetration testing conducted by third parties; maintaining cybersecurity insurance; and having dedicated cybersecurity staff.
Biggest changeThis group identifies and assesses risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods including, for example manual and automated tools, subscribing to reports and services that identify cybersecurity threats, evaluating our and our industry’s risk profile, evaluating threats reported to us and coordinating with law enforcement about such threats as may be appropriate, conducting internal and external audits, conducting internal threat assessments to evaluate for both internal and external threats, having third parties conduct threat assessments, and conducting vulnerability assessments designed to identify vulnerabilities. 95 Table of Contents Depending on the environment, systems and data, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example, an incident response policy; incident detection and response processes; a vulnerability management policy; a disaster recovery plan; risk assessments; encrypting certain data; network security controls; data segregation; maintaining access and physical controls; asset management, tracking and disposal; systems monitoring; employee training; penetration testing conducted by third parties; maintaining cybersecurity insurance; and having dedicated cybersecurity staff.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.
The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data for JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.
Based on our current operating plan, we believe that our existing cash and cash equivalents and short-term investments, will be sufficient to meet our anticipated operating expenses and capital expenditure requirements through at least the next 12 months, following the date of this Annual Report.
Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments, will be sufficient to meet our anticipated operating expenses and capital expenditure requirements through at least the next 12 months, following the date of this Annual Report.
Investing Activities Net cash used in investing activities of $41.2 million for the year ended December 31, 2023 was primarily due to $39.3 million of net purchases of short-term investments and by our purchase of property and equipment, primarily consisting of laboratory equipment of $1.9 million.
Net cash used in investing activities of $41.2 million for the year ended December 31, 2023 was primarily due to $39.3 million of net purchases of short-term investments and by our purchase of property and equipment, primarily consisting of laboratory equipment of $1.9 million.
Funding Requirements Based on our current operating plan, we believe that our existing cash and cash equivalents and short-term investments, will be sufficient to meet our anticipated operating expenses and capital expenditure requirements through at least the next 12 months, following the date of this Annual Report.
Funding Requirements Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments, will be sufficient to meet our anticipated operating expenses and capital expenditure requirements through at least the next 12 months, following the date of this Annual Report.
For example, (1) cybersecurity risk is addressed as a component of our enterprise risk management program; (2) the IT department and IT Director discuss cybersecurity risk with management, including our CFO and legal department to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our senior management evaluates material risks from cybersecurity threats against our overall business objectives and reports certain risks to the audit committee of the board of directors, which evaluates our overall enterprise risk.
For example, (1) cybersecurity risk is addressed as a component of our enterprise risk management program; (2) the IT department and Senior Director of IT discuss cybersecurity risk with management, including our legal department to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our senior management evaluates material risks from cybersecurity threats against our overall business objectives and reports certain risks to the audit committee of the board of directors, which evaluates our overall enterprise risk.
For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of 122 (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock has been publicly traded on the Nasdaq Global Market under the symbol “JANX” since our initial public offering on June 11, 2021. Prior to that date, there was no public market for our common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been publicly traded on the Nasdaq Global Market under the symbol “JANX” since our initial public offering on June 11, 2021. Prior to that date, there was no public market for our common stock.
We will need to raise substantial additional capital in the future. In addition, we cannot forecast which product candidates may be 116 subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
We will need to raise substantial additional capital in the future. In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Our cybersecurity incident response and vulnerability and patch management policies are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our CEO, CFO and General Counsel. Such management members work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
Our cybersecurity incident response and vulnerability and patch management policies are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our CEO and General Counsel. Such management members work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders 120 will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
Food and Drug Administration (FDA) in May 2022 and January 2023, respectively. As a result, we have separated direct costs for the development of JANX007 and JANX008 from preclinical stage programs and other direct unallocated costs for the years ended December 31, 2023 and 2022.
Food and Drug Administration (FDA) in May 2022 and January 2023, respectively. As a result, we have separated direct costs for the development of JANX007 and JANX008 from preclinical stage programs and other direct unallocated costs for the years ended December 31, 2024 and 2023.
Collaboration Revenue 121 We determined that our collaboration with Merck is a contract with a customer. We recognize revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration we are entitled to receive in exchange for such product or service.
Collaboration Revenue We determined that our collaboration with Merck is a contract with a customer. We recognize revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration we are entitled to receive in exchange for such product or service.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain of our personnel, including our IT Director, who has 20 years of experience in IT and cybersecurity and is a member of the Information Systems Audit and Control Association (ISACA).
Our cybersecurity risk assessment and management processes are implemented and maintained by certain of our personnel, including our Senior Director of IT, who has 20 years of experience in IT and cybersecurity and is a member of the Information Systems Audit and Control Association (ISACA).
In February 2024, we delivered written notice to BofA that we were suspending and terminating the prospectus related to the shares of our common stock issuable pursuant to the terms of the New Sale Agreement.
In February 2024, we delivered written notice to BofA that we were suspending and terminating the prospectus related to the shares of our common stock issuable pursuant to the terms of the Sale Agreement.
See Note 5 to our financial statements included elsewhere in this Annual Report for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock option grants. Equity award forfeitures are recognized as they occur.
See Note 4 to our financial statements included elsewhere in this Annual Report for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock option grants. Equity award forfeitures are recognized as they occur.
These processes include reviewing certain vendors’ written security program and security assessments, and imposing certain 110 contractual obligations related to cybersecurity on the vendor.
These processes include reviewing certain vendors’ written security program and security assessments, and imposing certain contractual obligations related to cybersecurity on the vendor.
The TRACTr platform produces TCEs with a tumor antigen-binding domain and a CD3 T cell binding domain, while the TRACIr platform produces bispecifics with a tumor antigen-binding domain and a costimulatory CD28 binding domain.
The TRACTr platform produces T cell engagers (TCEs) with a tumor antigen-binding domain and a CD3 T cell binding domain, while the TRACIr platform produces bispecifics with a tumor antigen-binding domain and a costimulatory CD28 binding domain.
No incremental costs of obtaining a contract have been incurred to date. Accrued Research and Development Expenses As part of the process of preparing our financial statements, we are required to estimate our accrued expenses as of each balance sheet date.
No incremental costs of obtaining a contract have been incurred to date. Accrued Clinical Trial and Research and Development Expenses As part of the process of preparing our financial statements, we are required to estimate our accrued expenses as of each balance sheet date.
(formerly COI Pharmaceuticals, Inc.) In January 2021, we entered into a Support Services Agreement (the 2021 Support Services Agreement) with Avalon BioVentures, Inc. (Avalon) that outlines the terms of services provided by Avalon to the Company, as well as the fees charged for such services.
(formerly COI Pharmaceuticals, Inc.) In January 2021, we entered into a Support Services Agreement (the 2021 Support Services Agreement) with Avalon BioVentures, Inc. (Avalon) that outlines the terms of services provided by Avalon to us, as well as the fees charged for such services.
Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.
Advance payments for goods and services that will be used in future clinical trial or research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.
Pursuant to our investment policy we have invested these funds in high-quality marketable security types with contractual maturity dates of up to three years until needed to fund our operations. 113 Issuer Purchases of Equity Securities Not applicable. It em 6. [Reserved] It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Pursuant to our investment policy we have invested the balance of these funds in high-quality marketable security types with contractual maturity dates of up to three years until needed to fund our operations. Issuer Purchases of Equity Securities Not applicable. It em 6. [Reserved] It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We have the right (but not the obligation) to buy out our remaining royalty obligations with respect to each WuXi Biologics Licensed Product by paying WuXi Biologics a one-time payment in an amount ranging from low single digit million dollars to a maximum of $15.0 million (Buyout Option).
We have the right (but not the obligation) to buy out our remaining 105 Table of Contents royalty obligations with respect to each WuXi Biologics Licensed Product by paying WuXi Biologics a one-time payment in an amount ranging from low single digit million dollars to a maximum of $15.0 million (Buyout Option).
Risks and Uncertainties Global economic and business activities continue to face widespread macroeconomic uncertainties, including those associated with COVID-19 and other public health crises, bank failures, inflation and monetary supply shifts, recession risks and potential disruptions from the Russia-Ukraine conflict, the war in the Middle East and related sanctions.
Risks and Uncertainties Global economic and business activities continue to face widespread macroeconomic uncertainties, including those associated with public health crises, bank failures, inflation and monetary supply shifts, recession risks and potential disruptions from the Russia-Ukraine conflict, the war in the Middle East and related sanctions.
Our IT Director is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
Our Senior Director of IT is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
While TCE therapeutics have displayed potent anti-tumor activity in hematological cancers, developing TCEs to treat solid tumors has faced challenges due to the limitations of prior TCE technologies, namely (i) on-target healthy tissue immune activation that contributes to CRS and healthy tissue toxicity and (ii) poor PK leading to short half-life.
While TCE therapeutics have displayed potent anti-tumor activity in hematological cancers, developing TCEs to treat solid tumors has faced challenges due to the limitations of prior TCE technologies, namely (i) on-target healthy tissue immune activation that contributes to cytokine release syndrome (CRS) and healthy tissue toxicity and (ii) poor pharmacokinetics (PK) leading to short half-life.
Stock-Based Compensation Expense Stock-based compensation expense represents the grant date fair value of equity awards, consisting of stock options and employee stock purchase rights, recognized on a straight-line basis over the requisite service period for 123 stock options and over the respective offering period for employee stock purchase plan rights.
Stock-Based Compensation Expense Stock-based compensation expense represents the grant date fair value of equity awards, consisting of stock options, restricted stock units and employee stock purchase plan rights, recognized on a straight-line basis over the requisite service period for stock options and restricted stock units and over the respective offering period for employee stock purchase plan rights.
Our Information Technology (IT) department and IT Director, with the assistance of our legal department and CFO, help identify, assess and manage our cybersecurity threats and risks.
Our Information Technology (IT) department and Senior Director of IT, with the assistance of our legal department, help identify, assess and manage our cybersecurity threats and risks.
The shares of common stock were sold at a price of $46.50 per share and the pre-funded common stock warrants were sold at a price of $46.499 per pre-funded common stock warrant, resulting in gross proceeds of $341.0 million.
The shares of 103 Table of Contents common stock were sold at a price of $46.50 per share and the pre-funded common stock warrants were sold at a price of $46.499 per pre-funded common stock warrant, resulting in gross proceeds of $341.0 million.
In addition, our incident response policy includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee receives periodic reports from our IT Director concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
In addition, our incident response policy includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee receives periodic reports from our Senior Director of IT concerning significant cybersecurity threats, related risks and the processes we have implemented to address them.
Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. 111 It em 4. Mine Safety Disclosures. Not applicable. 112 PART II It em 5.
Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. It em 4. Mine Safety Disclosures. Not applicable. 97 Table of Contents PART II It em 5.
Our future capital requirements will depend on many factors, including: • the initiation, trial design, progress, timing, costs and results of drug discovery, preclinical studies and clinical trials of our product candidates, and in particular the clinical trials for JANX007 and JANX008; • the number and characteristics of clinical programs that we pursue; • the outcome, timing and costs of seeking FDA, European Commission and any other comparable regulatory approvals for any future drug candidates; • the costs of manufacturing our product candidates; • the costs associated with hiring additional personnel and consultants as our preclinical, manufacturing and clinical activities increase; • the receipt of marketing approval and revenue received from any commercial sales of any of our product candidates, if approved; • the cost of commercialization activities for any of our product candidates, if approved, including marketing, sales and distribution costs; • the ability to establish and maintain strategic collaboration, licensing or other arrangements and the financial terms of such agreements; • the extent to which we in-license or acquire other products and technologies; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • our implementation of additional internal systems and infrastructure, including operational, financial and management information systems; • our costs associated with expanding our facilities or building out our laboratory space; • the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide from COVID-19 or other epidemics; and • the costs of operating as a public company.
Our future capital requirements will depend on many factors, including: • the initiation, trial design, progress, timing, costs and results of drug discovery, preclinical studies and clinical trials of our product candidates, and in particular the clinical trials for JANX007 and JANX008; • the number and characteristics of clinical programs that we pursue; • the outcome, timing and costs of seeking FDA, European Commission and any other comparable regulatory approvals for any future drug candidates; • the costs of manufacturing our product candidates; • the costs associated with hiring additional personnel and consultants as our preclinical, manufacturing and clinical activities increase; • the receipt of marketing approval and revenue received from any commercial sales of any of our product candidates, if approved; • the cost of commercialization activities for any of our product candidates, if approved, including marketing, sales and distribution costs; • the ability to establish and maintain strategic collaboration, licensing or other arrangements and the financial terms of such agreements; • the extent to which we in-license or acquire other products and technologies; • the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; • our implementation of additional internal systems and infrastructure, including operational, financial and management information systems; • our costs associated with expanding our facilities or building out our laboratory space; • the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions, including the military conflict in Ukraine and Russia, the war in the Middle East, epidemics and bank failures; and • the costs of operating as a public company.
Financing Activities 119 Net cash provided by financing activities of $59.5 million for the year ended December 31, 2023 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $56.5 million, and exercises of common stock options and from shares issued under our 2021 Employee Stock Purchase Plan (ESPP) of $3.0 million.
Net cash provided by financing activities of $59.5 million for the year ended December 31, 2023 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $56.5 million, and exercises of common stock options and from shares issued under our ESPP of $3.0 million.
When an entity grants a customer the option to acquire additional goods or services, that option is a separate performance obligation only if it provides a material right to the customer that the customer would not receive without entering into the contract.
When an entity grants a customer the option to acquire additional goods or services, that 106 Table of Contents option is a separate performance obligation only if it provides a material right to the customer that the customer would not receive without entering into the contract.
Avalon is a shared service company that provides certain back-office and administrative and research and development support services, including facilities support, to the portfolio 115 companies of Avalon Ventures, an entity that beneficially owns greater than 5% of our outstanding capital stock. The amounts paid to Avalon include support service fees or mark-ups of up to 5%.
Avalon is a shared service company that provides certain back-office and administrative and research and development support services, including facilities support, to the portfolio companies of Avalon Ventures, an entity that beneficially owned greater than 5% of our outstanding capital stock until November 2024. The amounts paid to Avalon include support service fees or mark-ups of up to 5%.
Our second clinical candidate, JANX008, is an epidermal growth factor receptor or EGFR-TRACTr and is being studied in a Phase 1 clinical trial for the treatment of multiple solid cancers including colorectal cancer, squamous cell carcinoma of the head and neck, non-small cell lung cancer, and renal cell carcinoma.
Our second clinical candidate, JANX008, is an epidermal growth factor receptor or EGFR-TRACTr and is being studied in a Phase 1 clinical trial for the treatment of multiple solid cancers including colorectal carcinoma, squamous cell carcinoma of the head and neck, non-small cell lung cancer, renal cell carcinoma, small cell lung cancer, pancreatic ductal adenocarcinoma and triple-negative breast cancer.
We recognized $8.1 million and $8.6 million of revenue under the Merck Agreement for the years ended December 31, 2023 and 2022, respectively.
We recognized $10.6 million and $8.1 million of revenue under the Merck Agreement for the years ended December 31, 2024 and 2023, respectively.
The audit committee also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. It em 2. Properties. Our corporate headquarters is located in San Diego, California, where we lease office and laboratory space pursuant to a lease agreement which commenced in July, 2022 and expires in January, 2033.
The audit committee also has access to various reports, summaries and presentations related to cybersecurity threats, risks and mitigation. 96 Table of Contents It em 2. Properties. Our corporate headquarters is located in San Diego, California, where we lease office and laboratory space pursuant to a lease agreement which commenced in July, 2022 and expires in January, 2033.
Recent Sales of Unregistered Securities None. Use of Proceeds On June 10, 2021, the SEC declared effective our registration statement on Form S-1 (File No. 333-256297), as amended, filed in connection with our initial public offering (IPO).
Use of Proceeds On June 10, 2021, the SEC declared effective our registration statement on Form S-1 (File No. 333-256297), as amended, filed in connection with our initial public offering (IPO).
Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $2.5 million, resulting in net proceeds of $56.5 million. In March 2024, we closed an underwritten offering of 5,397,301 shares of our common stock and pre-funded warrants to purchase 1,935,483 shares of common stock.
Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $2.5 million, resulting in net proceeds of $56.5 million. In March 2024, we closed an underwritten offering of 5,397,301 shares of our common stock and pre-funded warrants to purchase 1,935,483 shares of common stock at an exercise price of $0.001 per share.
Merck received an exclusive worldwide license for each selected target and intellectual property from the collaboration. In return, we are eligible to receive up to $500.5 million per target in upfront and milestone payments, plus royalties on sales of the products derived from the collaboration. Merck provides research funding under the collaboration.
Merck received an exclusive worldwide license for each selected target and intellectual property from the collaboration. In return, we are eligible to receive up to $500.5 million per target in upfront and milestone payments, plus royalties on sales 100 Table of Contents of the products derived from the collaboration.
As of December 31, 2023, we have not used any of the proceeds from our IPO and there has been no material change in the planned use of such proceeds from that described in the final prospectus filed by us with the SEC on June 11, 2021.
As of December 31, 2024, we have used $18.5 million of the proceeds from our IPO and there has been no material change in the planned use of such proceeds from that described in the final prospectus filed by us with the SEC on June 11, 2021.
The significant estimates in our accrued research and development expenses include the costs incurred for services performed by our vendors in connection with research and development activities for which we have not yet been invoiced.
The significant estimates in our accrued clinical trial and research and 107 Table of Contents development expenses include the costs incurred for services performed by our vendors in connection with clinical trial and research and development activities for which we have not yet been invoiced.
Risk Factors.” Overview We are an innovative clinical-stage biopharmaceutical company developing tumor-activated immunotherapies for cancer. Our proprietary technology has enabled the development of two distinct bispecific platforms: TRACTr and TRACIr.
Overview We are an innovative clinical-stage biopharmaceutical company developing tumor-activated immunotherapies for cancer. Our proprietary technology has enabled the development of two distinct bispecific platforms: Tumor Activated T Cell Engagers (TRACTr) and Tumor Activated Immunomodulators (TRACIr).
Fees related to the offering included underwriting discounts, commissions, and estimated offering expenses in the aggregate amount of $20.8 million, resulting in estimated net proceeds of $320.2 million.
Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $20.9 million, resulting in net proceeds of $320.1 million.
The increase of $1.5 million was primarily due to increases in indirect costs of $5.6 million and direct costs related to the development of JANX007 of $2.4 million, offset by decreases in direct costs related to the development of JANX008 of $2.2 million and preclinical stage programs and other unallocated direct costs of $4.3 million.
The increase of $13.5 million was primarily due to increases in direct costs related to the development of JANX007 of $7.8 million, direct costs related to the development of JANX008 of $1.1 million and indirect costs of $5.3 million, offset by decreases in preclinical stage programs and other direct unallocated costs of $0.7 million.
Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our board of directors may deem relevant. Stock Performance Graph Not applicable to a smaller reporting company.
Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our board of directors may deem relevant.
(Merck). 114 We have incurred operating losses since our inception and have not yet generated any product revenue. Our net losses were $58.3 million and $63.1 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $168.8 million.
(Merck). We have incurred operating losses since our inception and have not yet generated any product revenue. Our net losses were $69.0 million and $58.3 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $237.8 million.
Our CFO is responsible for approving budgets and, along with our IT Director and our legal department, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Our General Counsel is responsible for approving budgets and, along with our Senior Director of IT, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
(BofA) to sell shares of our common stock, from time to time, through an “at the market offering” program having an aggregate offering price of up to $150.0 million through which BofA would act as sales agent. As of December 31, 2023, $150.0 million of common stock remained available for sale under the New Sale Agreement.
(BofA) to sell shares of our common stock, from time to time, through an “at the market offering” program having an aggregate offering price of up to $150.0 million through which BofA would act as sales agent.
Holders of Common Stock As of February 29, 2024, there were 46,262,759 shares of common stock issued and held by approximately 24 stockholders of record. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Holders of Common Stock As of February 25, 2025, there were 59,105,147 shares of common stock issued and held by approximately 16 stockholders of record. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Financial Operations Overview Revenues To date, we have not generated any revenues from the commercial sale of any products, and we do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever.
The 2021 Support Services Agreement terminated on December 31, 2024. Financial Operations Overview Revenues To date, we have not generated any revenues from the commercial sale of any products, and we do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever.
In July 2023, we closed an underwritten offering of 4,153,717 shares of our common stock and pre-funded warrants to purchase 583,483 shares of common stock at an exercise price of $0.001 per share.
As of December 31, 2024, $150.0 million of common stock remained available for sale under the Sale Agreement. In July 2023, we closed an underwritten offering of 4,153,717 shares of our common stock and pre-funded warrants to purchase 583,483 shares of common stock at an exercise price of $0.001 per share.
Recent Accounting Pronouncements See Note 1 to our audited financial statements appearing in Part II, Item 8 of this Annual Report on Form 10-K for additional information. Emerging Growth Company Status We are an emerging growth company, as defined in the JOBS Act.
Recent Accounting Pronouncements See Note 1 to our audited financial statements appearing in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
The following summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash provided by (used in): Operating activities $ (50,575 ) $ (42,922 ) Investing activities (41,194 ) 58,266 Financing activities 59,548 500 Net increase (decrease) in cash, cash equivalents and restricted cash $ (32,221 ) $ 15,844 Operating Activities Net cash used in operating activities of $50.6 million for the year ended December 31, 2023 was primarily due to our net loss of $58.3 million and a change in operating assets and liabilities and other non-cash charges of $12.3 million, adjusted for $20.0 million of stock-based compensation expense.
The following summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ (43,814 ) $ (50,575 ) Investing activities (258,021 ) (41,194 ) Financing activities 713,235 59,548 Net increase (decrease) in cash, cash equivalents and restricted cash $ 411,400 $ (32,221 ) Operating Activities Net cash used in operating activities of $43.8 million for the year ended December 31, 2024 was primarily due to our net loss of $69.0 million and a change in operating assets and liabilities and other non-cash charges of $7.8 million, adjusted for $33.0 million of stock-based compensation expense.
Net cash used in operating activities of $42.9 million for the year ended December 31, 2022 was primarily due to our net loss of $63.1 million, adjusted for $17.2 million of stock-based compensation expense and a decrease in operating assets and liabilities and other non-cash charges of $3.0 million.
Net cash used in operating activities of $50.6 million for the year ended December 31, 2023 was primarily due to our net loss of $58.3 million and a change in operating assets and liabilities and other non-cash charges of $12.3 million, adjusted for $20.0 million of stock-based compensation expense.
However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.
However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.
Net cash provided by investing activities of $58.3 million for the year ended December 31, 2022 was primarily due to $64.7 million of net maturities of short-term investments offset by our purchase of property and equipment, primarily consisting of laboratory equipment of $6.4 million.
Investing Activities Net cash used in investing activities of $258.0 million for the year ended December 31, 2024 was primarily due to $257.7 million of net purchases of short-term investments and by our purchase of property and equipment, primarily consisting of laboratory equipment of $0.3 million.
Our indirect research and development expenses include: • salaries and employee-related costs, including recruiting fees and stock-based compensation for those individuals involved in research and development efforts; • maintenance of facilities and equipment, software license fees, depreciation; and • allocated facilities and equipment-related expenses, which include rent, utilities, insurance, and office supplies.
Our indirect research and development expenses include: • salaries and employee-related costs, including recruiting fees and stock-based compensation for those individuals involved in research and development efforts; • maintenance of facilities and equipment, software license fees, depreciation; and • allocated facilities and equipment-related expenses, which include rent, utilities, insurance, and office supplies. 101 Table of Contents We anticipate that our research and development expenses will substantially increase for the foreseeable future as we continue the development of our TRACTr and TRACIr platforms and the discovery and development of product candidates under our TRACTr and TRACIr platforms.
The increase in indirect costs was primarily due to increases in personnel costs of $2.8 million, facilities and other costs of $2.2 million and stock-based compensation expense of $0.6 million. General and Administrative Expense General and administrative expenses were $26.1 million and $22.3 million for the years ended December 31, 2023 and 2022, respectively.
General and Administrative Expense General and administrative expenses were $41.0 million and $26.1 million for the years ended December 31, 2024 and 2023, respectively. The increase of $14.9 million was primarily due to increases in stock-based compensation of $11.2 million, consulting and professional fees of $2.2 million and other general and administrative expenses of $1.5 million.
The shelf registration statement provides us with the ability to offer up to $400.0 million of certain securities, including shares of our common stock, from time to time. The specific terms of any offering under the shelf registration statement are established at the time of such offering.
The registration statement on Form S-3ASR that we filed in May 2024 provides us with the ability to offer an unlimited amount of certain securities, including shares of our common stock, from time to time. The specific terms of any offering under the shelf registration statement are established at the time of such offering.
The decrease of $0.5 million was primarily due to a decrease in full-time equivalent hours incurred in the performance of research services required under the Merck Agreement.
The increase of $2.5 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in June 2024 offset by a decrease in full-time equivalent hours incurred in the performance of research services required under the Merck Agreement.
We base our expenses related to research and development activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct research and development on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.
We base our expenses related to clinical trial and research and development activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct clinical trials and research and development on our behalf.
If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense accordingly.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense accordingly.
Research and Development Expense The following table summarizes our direct and indirect research and development expenses for the years ended December 31, 2023 and 2022: 117 Year Ended December 31, 2023 2022 Change (in thousands) Direct costs: JANX007 $ 7,895 $ 5,462 $ 2,433 JANX008 5,401 7,629 (2,228 ) Preclinical stage programs and other direct unallocated costs 13,950 18,233 (4,283 ) Total direct costs 27,246 31,324 (4,078 ) Indirect costs 27,676 22,117 5,559 Total research and development expenses $ 54,922 $ 53,441 $ 1,481 IND applications for JANX007 and JANX008 were cleared by the U.S.
Research and Development Expense The following table summarizes our direct and indirect research and development expenses for the years ended December 31, 2024 and 2023 (in thousands): 102 Table of Contents Year Ended December 31, 2024 2023 Change Direct costs: JANX007 $ 15,655 $ 7,895 $ 7,760 JANX008 6,541 5,401 1,140 Preclinical stage programs and other direct unallocated costs 13,223 13,950 (727 ) Total direct costs 35,419 27,246 8,173 Indirect costs 32,969 27,676 5,293 Total research and development expenses $ 68,388 $ 54,922 $ 13,466 IND applications for JANX007 and JANX008 were cleared by the U.S.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 Change (in thousands) Collaboration revenue $ 8,083 $ 8,612 $ (529 ) Operating expenses: Research and development 54,922 53,441 1,481 General and administrative 26,140 22,262 3,878 Total operating expenses 81,062 75,703 5,359 Loss from operations (72,979 ) (67,091 ) (5,888 ) Other income 14,686 4,032 10,654 Net loss $ (58,293 ) $ (63,059 ) $ 4,766 Collaboration Revenue Collaboration revenues were $8.1 million and $8.6 million for the years ended December 31, 2023 and 2022, respectively.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 (in thousands) Year Ended December 31, 2024 2023 Change Collaboration revenue $ 10,588 $ 8,083 $ 2,505 Operating expenses: Research and development 68,388 54,922 13,466 General and administrative 41,047 26,140 14,907 Total operating expenses 109,435 81,062 28,373 Loss from operations (98,847 ) (72,979 ) (25,868 ) Other income 29,853 14,686 15,167 Net loss $ (68,994 ) $ (58,293 ) $ (10,701 ) Collaboration Revenue Collaboration revenues were $10.6 million and $8.1 million for the years ended December 31, 2024 and 2023, respectively.
Net cash provided by financing activities of $0.5 million for the year ended December 31, 2022 was primarily due to proceeds from shares issued under our ESPP.
Financing Activities Net cash provided by financing activities of $713.2 million for the year ended December 31, 2024 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $698.3 million, and exercises of common stock options and from shares issued under our 2021 Employee Stock Purchase Plan (ESPP) of $14.9 million.
There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the clinical trial and research and development expense.
The increase of $10.7 million was due to the impact of increases in interest rates on our debt securities, resulting in increased interest income. Liquidity and Capital Resources We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses and negative cash flows for the foreseeable future.
Liquidity and Capital Resources We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses and negative cash flows for the foreseeable future. As of December 31, 2024, we had cash, cash equivalents, restricted cash and short-term investments of $1.0 billion.
In May 2023, we terminated the Sale Agreement. 118 In May 2023, we entered into an ATM Equity Offering SM Sales Agreement (New Sale Agreement) with BofA Securities, Inc.
Inclusive in this amount is $0.8 million of restricted cash that is not available for current use. In May 2023, we entered into an ATM Equity Offering SM Sales Agreement (Sale Agreement) with BofA Securities, Inc.
Our first clinical candidate, JANX007, is a prostate-specific membrane antigen or PSMA-TRACTr and is being investigated in a Phase 1 clinical trial in adult subjects with mCRPC. In February 2024 we announced updated interim clinical data for JANX007 which displayed meaningful PSA drops, and a favorable safety profile, low-grade CRS, and PK, consistent with the TRACTr mechanism-of-action.
Our first clinical candidate, JANX007, is a prostate-specific membrane antigen or PSMA-TRACTr and is being investigated 99 Table of Contents in a Phase 1 clinical trial in adult subjects with metastatic castration-resistant prostate cancer (mCRPC).
We will further separate direct costs related to our other programs as future IND applications are cleared by the FDA. These changes in presentation had no effect on net loss, total research and development expenses, stockholders’ equity, or cash flows as previously reported.
We will further separate direct costs related to our other programs as future IND applications are cleared by the FDA. Research and development expenses were $68.4 million and $54.9 million for the years ended December 31, 2024 and 2023, respectively.
Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. 104 Table of Contents Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
The increase of $3.8 million was primarily due to increases in stock-based compensation of $2.2 million, personnel and facilities related costs of $2.0 million, offset by a decrease in other general and administrative expenses of $0.4 million. Other Income Other income was $14.7 million and $4.0 million for the years ended December 31, 2023 and 2022, respectively.
Other Income Other income was $29.9 million and $14.7 million for the years ended December 31, 2024 and 2023, respectively. The increase of $15.2 million was due to an increased cash and cash equivalents balance resulting in increased interest income.
Removed
This group identifies and assesses risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods including, for example manual and automated tools, subscribing to reports and services that identify cybersecurity threats, evaluating our and our industry’s risk profile, evaluating threats reported to us and coordinating with law enforcement about such threats as may be appropriate, conducting internal and external audits, conducting internal threat assessments to evaluate for both internal and external threats, having third parties conduct threat assessments, and conducting vulnerability assessments designed to identify vulnerabilities.
Added
Stock Performance Graph The following stock performance graph illustrates a comparison from June 11, 2021 (the date our common stock commenced trading on the Nasdaq Global Market) through December 31, 2024, of the total cumulative stockholder return on our common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index.
Removed
The 2021 Support Services Agreement was most recently renewed in January 2024 and will continue to renew for additional one-year renewal periods until terminated by the parties. Either party may terminate the 2021 Support Services Agreement with 30 days written notice.
Added
The figures represented below assume an investment of $100 in our common stock at the closing price of $25.15 on June 11, 2021 and in the Nasdaq Composite Index and the Nasdaq Biotechnology Index on June 11, 2021, and that all dividends were reinvested, although dividends have not been declared on our common stock.
Removed
Certain research and development expenses as listed above include amounts paid to Avalon pursuant to the 2021 Support Services Agreement. We anticipate that our research and development expenses will substantially increase for the foreseeable future as we continue the development of our TRACTr and TRACIr platforms and the discovery and development of product candidates under our TRACTr and TRACIr platforms.
Added
The comparisons in the graph are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock. 98 Table of Contents Recent Sales of Unregistered Securities None.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

116 edited+68 added−33 removed100 unchanged
Biggest changeA reconciliation of the Company’s income tax expense (benefit) to the amount computed by applying the federal statutory income tax rate is summarized as follows (in thousands): Year Ended December 31, 2023 2022 Expected tax benefit computed at federal statutory rate $ ( 12,242 ) $ ( 13,242 ) State income taxes, net of federal tax benefit ( 2,827 ) ( 3,754 ) Permanent differences 3,567 1,899 Research and development credits ( 4,300 ) ( 2,930 ) Reserve for uncertain tax positions 1,058 715 Other 124 80 Change in valuation allowance 14,620 17,232 Income tax expense (benefit) $ — $ — Significant components of the Company’s net deferred tax assets (liabilities) are summarized as follows (in thousands): December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 18,745 $ 16,261 Capitalized research and development 15,698 8,310 Lease liability 6,868 7,081 Research and development credit carryforwards 6,597 3,377 Stock-based compensation 4,005 3,453 Other 713 430 Total deferred tax assets 52,626 38,912 Valuation allowance ( 44,981 ) ( 30,976 ) Net deferred tax assets 7,645 7,936 Deferred tax liabilities: ROU asset ( 5,831 ) ( 6,235 ) Property and equipment ( 1,498 ) ( 1,519 ) Other ( 316 ) ( 182 ) Total gross deferred tax liabilities ( 7,645 ) ( 7,936 ) Net deferred tax assets $ — $ — Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Biggest changeNotes to Financial Statements - (Continued) December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 25,676 $ 18,745 Capitalized research and development 26,615 15,698 Lease liability 5,961 6,868 Research and development credit carryforwards 11,286 6,597 Stock-based compensation 3,712 4,005 Other 152 713 Total deferred tax assets 73,402 52,626 Valuation allowance ( 66,740 ) ( 44,981 ) Net deferred tax assets 6,662 7,645 Deferred tax liabilities: ROU asset ( 4,993 ) ( 5,831 ) Property and equipment ( 1,008 ) ( 1,498 ) Unrealized gains ( 560 ) ( 186 ) Other ( 101 ) ( 130 ) Total gross deferred tax liabilities ( 6,662 ) ( 7,645 ) Net deferred tax assets $ — $ — Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income.
The only component of other comprehensive loss is unrealized gain (loss) on available-for-sale securities. Comprehensive losses have been reflected in the statements of operations and comprehensive loss and as a separate component in the statements of stockholders’ equity.
The only component of other comprehensive gain (loss) is unrealized gain (loss) on available-for-sale securities. Comprehensive losses have been reflected in the statements of operations and comprehensive loss and as a separate component in the statements of stockholders’ equity.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and financial officer, as appropriate to allow timely decisions regarding required disclosure.
The Company is also subject to credit risk from its accounts receivable. The Company generally does not perform evaluations of customers’ financial condition and generally does not require collateral. For the years ended December 31, 2023 and 2022, all of the Company’s revenue related to a single customer.
The Company is also subject to credit risk from its accounts receivable. The Company generally does not perform evaluations of customers’ financial condition and generally does not require collateral. For the years ended December 31, 2024 , 2023 and 2022, all of the Company’s revenue related to a single customer.
The Company considers the decline in market value for the securities to be primarily attributable to current economic conditions and interest rate adjustments, rather than credit-related factors and does not intend to sell any securities prior to maturity. No allowance for credit losses has been recorded as of December 31, 2023 or December 31, 2022.
The Company considers the decline in market value for the securities to be primarily attributable to current economic conditions and interest rate adjustments, rather than credit-related factors and does not intend to sell any securities prior to maturity. No allowance for credit losses has been recorded as of December 31, 2024 or December 31, 2023.
Accrued interest receivable is included in prepaid expenses and other current assets in the accompanying balance sheets. Contractual maturities of available-for-sale debt securities are as follows (in thousands): As of December 31, 2023 Due in 1 Year or Less Due Between 1 and 3 Years U.S.
Accrued interest receivable is included in prepaid expenses and other current assets in the accompanying balance sheets. Contractual maturities of available-for-sale debt securities are as follows (in thousands): As of December 31, 2024 Due in 1 Year or Less Due Between 1 and 3 Years U.S.
If ownership changes have occurred or occur in the future, the amount of remaining tax attribute carryforwards available to offset taxable income and income tax expense in future years may be restricted or eliminated. If eliminated, the related asset would be removed from deferred tax assets with a corresponding reduction in the valuation allowance.
If ownership changes have occurred or occurs in the future, the amount of remaining tax attribute carryforwards available to offset taxable income and income tax expense in future years may be restricted or eliminated. If eliminated, the related asset would be removed from deferred tax assets with a corresponding reduction in the valuation allowance.
Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2023, our internal control over financial reporting was effective.
Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2024, our internal control over financial reporting was effective.
To date the Company has funded its operations primarily with the net proceeds from the issuance of convertible promissory notes, the issuance of convertible preferred stock, the issuance of common stock in its initial public offering (“IPO”), the issuance of common stock and pre-funded common stock warrants in an underwritten offering, the exercise of common stock options, and amounts received under a collaboration agreement.
To date the Company has funded its operations primarily with the net proceeds from the issuance of convertible promissory notes, the issuance of convertible preferred stock, the issuance of common stock in its initial public offering (“IPO”), the issuance of common stock and pre-funded common stock warrants in underwritten offerings, the exercise of common stock options, and amounts received under a collaboration agreement.
Further, the Company is not currently under examination by any federal, state or local tax authority. 8. 401(k) Plan Effective April 2021, the Company adopted a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code available to eligible employees.
Further, the Company is not currently under examination by any federal, state or local tax authority. 7. 401(k) Plan Effective April 2021, the Company adopted a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code available to eligible employees.
The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants under the Plans were as follows: Year Ended December 31, 2023 2022 Risk-free interest rate 3.5 % – 4.7 % 1.5 % – 4.2 % Expected volatility 82 % – 87 % 81 % – 85 % Expected term (in years) 5.3 – 6.1 5.3 – 6.1 Expected dividend yield — — Risk-free interest rate .
The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants under the Plans were as follows: Year Ended December 31, 2024 2023 2022 Risk-free interest rate 3.6 % – 4.6 % 3.5 % – 4.7 % 1.5 % – 4.2 % Expected volatility 83 % – 106 % 82 % – 87 % 81 % – 85 % Expected term (in years) 5.3 – 6.1 5.3 – 6.1 5.3 – 6.1 Expected dividend yield — — — Risk-free interest rate .
Liquidity and Capital Resources From its inception through December 31, 2023, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital and developing its TRACTr and TRACIr therapeutic platforms and assets.
Liquidity and Capital Resources From its inception through December 31, 2024, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital and developing its TRACTr and TRACIr therapeutic platforms and assets.
Because the Company does not have sufficient historical exercise behavior to provide a reasonable basis upon which to estimate the expected term, it determines the expected life assumption using the simplified method, for employees, which is an average of the contractual term of the option and its vesting period. The expected term for nonemployee options is generally the contractual term.
Because the Company does not have sufficient historical exercise behavior to provide a reasonable basis upon which to estimate the expected term, it determines the expected life assumption using the simplified method, for employees and nonemployee directors, which is an average of the contractual term of the option and its vesting period.
The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $ 168.8 million as of December 31, 2023. The Company has a limited operating history, has not generated any product revenue, and the sales and income potential of its business is unproven.
The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $ 237.8 million as of December 31, 2024. The Company has a limited operating history, has not generated any product revenue, and the sales and income potential of its business is unproven.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
The Company has excluded weighted-average unvested shares of 27,458 shares and 182,194 shares from the weighted-average number of shares of common stock outstanding for the years ended December 31, 2023 and 2022, respectively.
The Company has excluded weighted-average unvested shares of 3,645 shares, 27,458 shares and 182,194 shares from the weighted-average number of shares of common stock outstanding for the years ended December 31, 2024, 2023 and 2022, respectively.
The following tables summarize the Company’s financial instruments measured at fair value on a recurring basis (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2023: Assets: Cash equivalents: Money market funds $ 14,751 $ 14,751 $ — $ — Total cash equivalents 14,751 14,751 — — Short-term investments: U.S.
The following tables summarize the Company’s financial instruments measured at fair value on a recurring basis (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2024: Assets: Cash equivalents: Money market funds $ 427,959 $ 427,959 $ — $ — Total cash equivalents 427,959 427,959 — — Short-term investments: U.S.
The pre-funded common stock warrants also include a separate provision whereby the exercisability of the warrants may be limited if, upon exercise, the warrant holder or any of its affiliates would beneficially own more than 19.9 % of the Company’s outstanding common stock.
The pre-funded common stock warrants also include a separate provision whereby the exercisability of the warrants may be limited if, upon exercise, the warrant holder or any of its affiliates would beneficially own more than a certain percentage of the Company’s outstanding common stock.
Federal NOL carryforwards totaling $ 0.5 million begin to expire in 2037 , unless previously utilized, and federal NOL carryforwards of $ 49.4 million generated after 2017, may be carried forward indefinitely but can only be utilized to offset 80 % of future taxable income.
Federal NOL carryforwards totaling $ 0.5 million begin to expire in 2037 , unless previously utilized, and federal NOL carryforwards of $ 65.7 million generated after 2017, may be carried forward indefinitely but can only be utilized to offset 80 % of future taxable income.
Notes to Financial Statements - (Continued) an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.
Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.
There can be no assurance that such financing will be available or will be at terms acceptable to the Company, especially in light of COVID-19 and other public health crises, current financial conditions within the banking industry, including the effects of recent failures of financial institutions and liquidity levels, as well as recent or anticipated changes in interest rates and the inflationary macro environment.
There can be no assurance that such financing will be available or will be at terms acceptable to the Company, especially in light of public health crises, financial conditions within the banking industry, including the effects of failures of financial institutions and liquidity levels, as well as changes in interest rates and the inflationary macro environment.
Notes to Financial Statements - (Continued) Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2022: Assets: Cash equivalents: Money market funds $ 12,697 $ 12,697 $ — $ — Total cash equivalents 12,697 12,697 — — Short-term investments: U.S.
Notes to Financial Statements - (Continued) Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2023: Assets: Cash equivalents: Money market funds $ 14,751 $ 14,751 $ — $ — Total cash equivalents 14,751 14,751 — — Short-term investments: U.S.
(the Company) as of December 31, 2023 and 2022, the related statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).
(the Company) as of December 31, 2024 and 2023, the related statements of operations and comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
Evaluation of Disclosure Controls and Procedures As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management with the participation of our Chief Executive Officer and our Acting Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.
Evaluation of Disclosure Controls and Procedures As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management with the participation of our Chief Executive Officer (principal executive and financial officer), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024.
Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $ 2.5 million, resulting in net proceeds of $ 56.5 million. The pre-funded common stock warrants will not expire until exercised in full and are exercisable in cash or by means of a cashless exercise. 140 Table of Contents Janux Therapeutics, Inc.
Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $ 2.5 million, resulting in net proceeds of $ 56.5 million. The pre-funded common stock warrants will not expire until exercised in full and are exercisable in cash or by means of a cashless exercise.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and our Acting Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer (principal executive and financial officer) concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Accounting Pronouncements Pending Adoption In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. The new standard requires a company to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the chief operating decision maker (CODM).
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. The new standard requires a company to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the chief operating decision maker.
Following the research term, Merck will have the sole right to research, develop, manufacture, and commercialize the licensed compounds and products directed against the Collaboration Targets.
Following the research term, Merck has the sole right to research, develop, manufacture, and commercialize the licensed compounds and products directed against the Collaboration Targets.
The most significant estimates in the Company’s financial statements relate to estimates to complete the performance obligations and the estimated transaction price for collaboration revenue, accruals for research and development expenses, stock-based compensation and fair value measurements.
The most significant estimates in the Company’s financial statements relate to estimates to complete the performance obligations and the estimated transaction price for collaboration revenue, accruals for clinical trials and other research and development arrangements, stock-based compensation and fair value measurements.
The state R&D credit carryforwards do not expire. Utilization of the Company's NOL and R&D credit carryforwards may be subject to substantial annual limitations in the event a cumulative ownership change has occurred, or that could occur in the future, as required by Section 382 of the Internal Revenue Code 145 Table of Contents Janux Therapeutics, Inc.
The state R&D credit carryforwards do not expire. Utilization of the Company's NOL and R&D credit carryforwards may be subject to substantial annual limitations in the event a cumulative ownership change has occurred, or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code").
As of December 31, 2023 , total unrecognized stock-based compensation cost associated with option grants was $ 34.1 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.2 years.
As of December 31, 2024 , total unrecognized stock-based compensation cost associated with option grants was $ 33.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.2 years.
Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, including pre-funded common stock warrants that were issued in an underwritten offering in July 2023 (Note 5), without consideration for potentially dilutive securities.
Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, including pre-funded common stock warrants that were issued in underwritten offerings (Note 4), without consideration for potentially dilutive securities.
Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment.
Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker ("CODM"), or decision-making group, in making decisions on how to allocate resources and assess performance.
Statem ents of Cash Flows (in thousands) Year Ended December 31, 2023 2022 Cash flows from operating activities Net loss $ ( 58,293 ) $ ( 63,059 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 1,955 841 Stock-based compensation 20,005 17,203 Accretion of discounts on investments, net ( 7,688 ) ( 2,183 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets 210 ( 3,369 ) Other long-term assets ( 1,119 ) ( 1,270 ) Accounts payable 277 ( 294 ) Accrued expenses ( 678 ) 4,156 Deferred revenue ( 5,922 ) 1,764 Operating lease right-of-use assets and liabilities, net 678 3,289 Net cash used in operating activities ( 50,575 ) ( 42,922 ) Cash flows from investing activities Purchases of property and equipment ( 1,850 ) ( 6,445 ) Purchases of short-term investments ( 317,344 ) ( 294,389 ) Maturities of short-term investments 278,000 359,100 Net cash provided by (used in) investing activities ( 41,194 ) 58,266 Cash flows from financing activities Proceeds from exercise of common stock options and employee stock purchase plan 3,018 500 Proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs 56,530 — Net cash provided by financing activities 59,548 500 Net increase (decrease) in cash, cash equivalents and restricted cash ( 32,221 ) 15,844 Cash, cash equivalents and restricted cash – beginning of year 52,242 36,398 Cash, cash equivalents and restricted cash – end of period $ 20,021 $ 52,242 Supplemental disclosure of noncash investing and financing activities Unpaid property and equipment $ 132 $ 109 Vesting of restricted common stock $ 149 $ 1,034 Unrealized gain (loss) on available-for-sale securities, net $ 2,200 $ ( 1,265 ) Operating lease liabilities arising from right-of-use assets $ — $ 23,422 See accompanying notes. 129 Table of Contents Janux Therapeutics, Inc.
Statem ents of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities Net loss $ ( 68,994 ) $ ( 58,293 ) $ ( 63,059 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 2,060 1,955 841 Stock-based compensation 33,020 20,005 17,203 Accretion of discounts on investments, net ( 10,585 ) ( 7,688 ) ( 2,183 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 3,280 ) 210 ( 3,369 ) Other long-term assets ( 375 ) ( 1,119 ) ( 1,270 ) Accounts payable 1,584 277 ( 294 ) Accrued expenses 4,426 ( 678 ) 4,156 Deferred revenue ( 1,705 ) ( 5,922 ) 1,764 Operating lease right-of-use assets and liabilities, net 35 678 3,289 Net cash used in operating activities ( 43,814 ) ( 50,575 ) ( 42,922 ) Cash flows from investing activities Purchases of property and equipment ( 359 ) ( 1,850 ) ( 6,445 ) Purchases of short-term investments ( 470,577 ) ( 317,344 ) ( 294,389 ) Maturities of short-term investments 212,915 278,000 359,100 Net cash provided by (used in) investing activities ( 258,021 ) ( 41,194 ) 58,266 Cash flows from financing activities Proceeds from exercise of common stock options and employee stock purchase plan 14,968 3,018 500 Proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs 698,267 56,530 — Net cash provided by financing activities 713,235 59,548 500 Net increase (decrease) in cash, cash equivalents and restricted cash 411,400 ( 32,221 ) 15,844 Cash, cash equivalents and restricted cash – beginning of year 20,021 52,242 36,398 Cash, cash equivalents and restricted cash – end of period $ 431,421 $ 20,021 $ 52,242 Supplemental disclosure of noncash investing and financing activities Unpaid property and equipment $ 6 $ 132 $ 109 Unpaid issuance costs $ 347 $ — $ — Vesting of restricted common stock $ 20 $ 149 $ 1,034 Unrealized gain (loss) on available-for-sale securities, net $ 1,498 $ 2,200 $ ( 1,265 ) Operating lease liabilities arising from right-of-use assets $ — $ — $ 23,422 See accompanying notes. 115 Table of Contents Janux Therapeutics, Inc.
Notes to Financial Statements - (Continued) Stock-based compensation expense represents the grant date fair value of equity awards, consisting of stock options and employee stock purchase rights, recognized on a straight-line basis over the requisite service period for stock options and over the respective offering period for employee stock purchase plan rights.
Stock-Based Compensation Stock-based compensation expense represents the grant date fair value of equity awards, consisting of stock options, restricted stock units and employee stock purchase plan rights, recognized on a straight-line basis over the requisite service period for stock options and restricted stock units, and over the respective offering period for employee stock purchase plan rights.
Statemen ts of Operations and Comprehensive Loss (in thousands, except share and per share data) Year Ended December 31, 2023 2022 Collaboration revenue $ 8,083 $ 8,612 Operating expenses: Research and development 54,922 53,441 General and administrative 26,140 22,262 Total operating expenses 81,062 75,703 Loss from operations ( 72,979 ) ( 67,091 ) Other income: Interest income 14,686 4,032 Total other income 14,686 4,032 Net loss $ ( 58,293 ) $ ( 63,059 ) Other comprehensive gain (loss): Unrealized gain (loss) on available-for-sale securities, net 2,200 ( 1,265 ) Comprehensive loss $ ( 56,093 ) $ ( 64,324 ) Net loss per common share, basic and diluted $ ( 1.32 ) $ ( 1.52 ) Weighted-average shares of common stock outstanding, basic and diluted 44,016,283 41,469,631 See accompanying notes. 127 Janux Therapeutics, Inc.
Statemen ts of Operations and Comprehensive Loss (in thousands, except share and per share data) Year Ended December 31, 2024 2023 2022 Collaboration revenue $ 10,588 $ 8,083 $ 8,612 Operating expenses: Research and development 68,388 54,922 53,441 General and administrative 41,047 26,140 22,262 Total operating expenses 109,435 81,062 75,703 Loss from operations ( 98,847 ) ( 72,979 ) ( 67,091 ) Other income: Interest income 29,853 14,686 4,032 Total other income 29,853 14,686 4,032 Net loss $ ( 68,994 ) $ ( 58,293 ) $ ( 63,059 ) Other comprehensive gain (loss): Unrealized gain (loss) on available-for-sale securities, net 1,498 2,200 ( 1,265 ) Comprehensive loss $ ( 67,496 ) $ ( 56,093 ) $ ( 64,324 ) Net loss per common share, basic and diluted $ ( 1.28 ) $ ( 1.32 ) $ ( 1.52 ) Weighted-average shares of common stock outstanding, basic and diluted 53,751,480 44,016,283 41,469,631 See accompanying notes. 113 Table of Contents Janux Therapeutics, Inc.
Notes to Financial Statements - (Continued) of 1986, as amended (the "Code"). In general, an "ownership change," as defined by Section 382 of the Code, results from a transaction, or series of transactions over a three-year period, resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups.
In general, an "ownership change," as defined by Section 382 of the Code, results from a transaction, or series of transactions over a three-year period, resulting in an ownership change of more than 50% of the outstanding common stock of a company by certain stockholders or public groups.
Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
The Company recognizes forfeitures for all awards as they occur. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
State NOL carryforwards totaling $ 117.6 million begin to expire in 2037 , unless previously utilized. In addition, the Company also has federal and state research and development ("R&D") credit carryforwards totaling $ 6.4 million and $ 3.1 million respectively. The federal R&D credit carryforwards will begin to expire in 2037 unless previously utilized.
State NOL carryforwards totaling $ 167.6 million begin to expire in 2037 , unless previously utilized. In addition, the Company also has federal and state research and development ("R&D") credit carryforwards totaling $ 10.9 million and $ 5.3 million respectively. The federal R&D credit carryforwards will begin to expire in 2037 unless previously utilized.
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying balance sheets that sum to the amounts shown in the statements of cash flows (in thousands): December 31, 2023 2022 Cash and cash equivalents $ 19,205 $ 51,426 Restricted cash 816 816 Total cash and cash equivalents and restricted cash $ 20,021 $ 52,242 Short-Term Investments Short-term investments consist of U.S.
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying balance sheets that sum to the amounts shown in the statements of cash flows (in thousands): December 31, 2024 2023 Cash and cash equivalents $ 430,605 $ 19,205 Restricted cash 816 816 Total cash and cash equivalents and restricted cash $ 431,421 $ 20,021 Short-Term Investments Short-term investments consist of U.S.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.
Notes to Financial Statements - (Continued) The Company has no t recorded a current or deferred tax expense or benefit for the years ended December 31, 2023 or 2022. The net losses for the years ended December 31, 2023 and 2022 were generated solely in the United States.
Income Taxes The Company has no t recorded a current or deferred tax expense or benefit for the years ended December 31, 2024, 2023 or 2022. The net losses for the years ended December 31, 2024, 2023 and 2022 were generated solely in the United States.
As of December 31, 2023 and 2022, the Company had unrecognized tax benefits of $ 2.4 million an d $ 1.3 mil lion, respectively, which if recognized currently, should not impact the effective tax rate due to the Company maintaining a full valuation allowance.
As of December 31, 2024 and 2023, the Company had unrecognized tax benefits of $ 4.0 million and $ 2.4 million, respectively, which if recognized currently, should not impact the effective tax rate due to the Company maintaining a full valuation allowance.
If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their 122 Table of Contents Janux Therapeutics, Inc. Notes to Financial Statements - (Continued) net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
Given the Company’s limited historical stock price volatility data, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available, including the Company's historical volatility, weighted by years of available trading data within the expected term. The peer group was developed based on companies in the biotechnology industry.
For options granted in the initial years following the Company’s IPO, given the Company’s limited historical stock price volatility data, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available, including the Company’s historical volatility, weighted by years of available trading data within the expected term.
Notes to Financial Statements - (Continued) An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company has not recognized any impairment losses through December 31, 2023 .
An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Impairment losses recognized through December 31, 2024 were not material.
Property and Equipment, Net Property and equipment, net consists of laboratory equipment, furniture and fixtures and computer equipment and software. Property and equipment is stated at cost and depreciated over the estimated useful lives of the assets (generally five years ) using the straight-line method.
Property and Equipment, Net Property and equipment, net consists of laboratory equipment, furniture and fixtures and computer equipment and software. Property and equipment is stated at cost and depreciated over the estimated useful lives of the assets (generally five years ) using the straight-line method. Repairs and maintenance costs are charged to expense as incurred.
As of December 31, 2023 , total unrecognized stock-based compensation expense related to the ESPP was $ 0.7 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.6 years. 142 Table of Contents Janux Therapeutics, Inc.
As of December 31, 2024 , total unrecognized stock-based compensation expense related to the ESPP was $ 0.6 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.3 years.
Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2022 was $ 0.2 million. Contingencies From time to time, the Company may be subject to claims or lawsuits arising in the ordinary course of business.
Cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2024 , 2023 and 2022 was $ 3.4 million, $ 2.8 million and $ 0.2 milli on, respectively. Contingencies From time to time, the Company may be subject to claims or lawsuits arising in the ordinary course of business.
The Company determined that the initial transaction price under the Merck Agreement for the Second Collaboration Target is $ 12.0 million, consisting of the upfront, non-refundable and non-creditable payment of $ 8.0 million and the aggregate estimated reimbursable research program funding of $ 4.0 million.
The Company determined that the initial transaction price under the Merck Agreement for the Second Collaboration Target is $ 12.0 million, consisting of the upfront, non-refundable and non-creditable payment of $ 8.0 million and the aggregate estimated reimbursable research program funding of $ 4.0 million. The performance obligations related to the Collaboration Targets were completed as of December 31, 2024.
If an element of variability exists, the Company must estimate the consideration it expects to receive and uses that amount as the basis for recognizing revenue as the product or the service is transferred to the customer.
If a significant financing component exists, the transaction price is adjusted for the time value of money. If an element of variability exists, the Company must estimate the consideration it expects to receive and uses that amount as the basis for recognizing revenue as the product or the service is transferred to the customer.
Such an ownership change may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The Company has not completed such an ownership change analysis pursuant to Section 382 of the Code.
Such an ownership change may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.
The following table summarizes the changes to the Company’s gross unrecognized tax benefits for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Balance at beginning of year $ 1,273 $ 510 Increases related to prior year tax positions 126 — Increases related to current year tax positions 990 763 Balance at end of year $ 2,389 $ 1,273 The Company had no accrual for interest or penalties on the Company's balance sheets at December 31, 2023 or 2022, and has not recognized interest and/or penalties in the statement of operations and comprehensive loss for the years ended December 31, 2023 and 2022.
Notes to Financial Statements - (Continued) Year Ended December 31, 2024 2023 2022 Balance at beginning of year $ 2,389 $ 1,273 $ 510 Increases related to prior year tax positions — 126 — Increases related to current year tax positions 1,642 990 763 Balance at end of year $ 4,031 $ 2,389 $ 1,273 The Company had no accrual for interest or penalties on the Company's balance sheets at December 31, 2024 or 2023, and has not recognized interest and/or penalties in the statement of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022.
Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at December 31, 2021 41,243,137 $ 41 $ 413,967 $ ( 270 ) $ ( 47,411 ) 366,327 Exercise of common stock options 7,405 — 1 — — 1 Shares issued under employee stock purchase plan 54,299 — 499 — — 499 Vesting of restricted shares 311,419 1 1,033 — — 1,034 Stock-based compensation — — 17,203 — — 17,203 Unrealized loss on available-for-sale securities, net — — — ( 1,265 ) — ( 1,265 ) Net loss — — — — ( 63,059 ) ( 63,059 ) Balance at December 31, 2022 41,616,260 $ 42 $ 432,703 $ ( 1,535 ) $ ( 110,470 ) $ 320,740 Issuance of common stock and pre-funded common stock warrants, net of issuance costs 4,153,717 4 56,526 — — 56,530 Exercise of pre-funded common stock warrants 80,257 — — — — — Exercise of common stock options 253,545 — 2,246 — — 2,246 Shares issued under employee stock purchase plan 90,574 — 772 — — 772 Vesting of restricted shares 58,087 — 149 — — 149 Stock-based compensation — — 20,005 — — 20,005 Unrealized gain on available-for-sale securities, net — — — 2,200 — 2,200 Net loss — — — — ( 58,293 ) ( 58,293 ) Balance at December 31, 2023 46,252,440 $ 46 $ 512,401 $ 665 $ ( 168,763 ) $ 344,349 See accompanying notes. 128 Janux Therapeutics, Inc.
Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at December 31, 2021 41,243,137 $ 41 $ 413,967 $ ( 270 ) $ ( 47,411 ) 366,327 Exercise of common stock options 7,405 — 1 — — 1 Shares issued under employee stock purchase plan 54,299 — 499 — — 499 Vesting of restricted shares 311,419 1 1,033 — — 1,034 Stock-based compensation — — 17,203 — — 17,203 Unrealized loss on available-for-sale securities, net — — — ( 1,265 ) — ( 1,265 ) Net loss — — — — ( 63,059 ) ( 63,059 ) Balance at December 31, 2022 41,616,260 $ 42 $ 432,703 $ ( 1,535 ) $ ( 110,470 ) $ 320,740 Issuance of common stock and pre-funded common stock warrants, net of $ 2,495 of issuance costs 4,153,717 4 56,526 — — 56,530 Exercise of pre-funded common stock warrants 80,257 — — — — — Exercise of common stock options 253,545 — 2,246 — — 2,246 Shares issued under employee stock purchase plan 90,574 — 772 — — 772 Vesting of restricted shares 58,087 — 149 — — 149 Stock-based compensation — — 20,005 — — 20,005 Unrealized gain on available-for-sale securities, net — — — 2,200 — 2,200 Net loss — — — — ( 58,293 ) ( 58,293 ) Balance at December 31, 2023 46,252,440 $ 46 $ 512,401 $ 665 $ ( 168,763 ) $ 344,349 Issuance of common stock and pre-funded common stock warrants, net of $ 45,554 of issuance costs 11,548,094 12 697,908 — — 697,920 Exercise of common stock options 1,152,192 1 14,175 — — 14,176 Issuance of common stock upon vesting of restricted stock units 2,500 — — — — — Shares issued under employee stock purchase plan 99,061 — 792 — — 792 Vesting of restricted shares 10,319 — 20 — — 20 Stock-based compensation — — 33,020 — — 33,020 Unrealized gain on available-for-sale securities, net — — — 1,498 — 1,498 Net loss — — — — ( 68,994 ) ( 68,994 ) Balance at December 31, 2024 59,064,606 $ 59 $ 1,258,316 $ 2,163 $ ( 237,757 ) $ 1,022,781 See accompanying notes. 114 Table of Contents Janux Therapeutics, Inc.
The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of December 31, 2023, the Company is not currently party to any material legal proceedings. 4.
The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of December 31, 2024 , the Company is not currently party to any material legal proceedings. 125 Table of Contents Janux Therapeutics, Inc. Notes to Financial Statements - (Continued) 4.
Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as 130 Table of Contents Janux Therapeutics, Inc.
Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company’s operating leases are subject to additional variable charges, including common area maintenance, property taxes, property insurance and other variable costs. Given the variable nature of such costs, they are recognized as expense as incurred.
The Company’s operating leases are subject to additional variable charges, including common area maintenance, property taxes, property insurance and other variable costs. Given the variable nature of such costs, they are recognized as expense as incurred.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Notes to Financial Statements - (Continued) require Merck to obtain a license to obtain a license to third-party intellectual property in order to commercialize the licensed products, or that are subject to compulsory licensing.
Notes to Financial Statements - (Continued) product-by-product and country-by-country basis, for licensed products not covered by patent claims, or that require Merck to obtain a license to obtain a license to third-party intellectual property in order to commercialize the licensed products, or that are subject to compulsory licensing.
Treasury securities $ 71,072 $ 242 $ ( 14 ) $ 71,300 U.S. agency bonds 166,699 591 ( 187 ) 167,103 Asset-backed securities 5,078 — ( 23 ) 5,055 Corporate debt securities 1,999 — — 1,999 Commercial paper 79,310 56 — 79,366 Total $ 324,158 $ 889 $ ( 224 ) $ 324,823 As of December 31, 2022 Amortized Unrealized Estimated Cost Gains Losses Fair Value U.S.
Treasury securities $ 71,072 $ 242 $ ( 14 ) $ 71,300 U.S. agency bonds 166,699 591 ( 187 ) 167,103 Asset-backed securities 5,078 — ( 23 ) 5,055 Corporate debt securities 1,999 — — 1,999 Commercial paper 79,310 56 — 79,366 Total $ 324,158 $ 889 $ ( 224 ) $ 324,823 The amortized cost and estimated fair value in the tables above exclude $ 5.4 million and $ 2.2 million of accrued interest receivable as of December 31, 2024 and 2023, respectively.
(“BofA”) to sell shares of common stock, from time to time, through an “at the market offering” program having an aggregate offering price of up to $ 150.0 million through which BofA would act as sales agent. There was no activity from the New Sale Agreement during the year ended December 31, 2023.
(“BofA”) to sell shares of common stock, from time to time, through an “at the market offering” program having an aggregate offering price of up to $ 150.0 million through which BofA would act as sales agent.
In May 2023 , the Company terminated the Sale Agreement. In May 2023, the Company entered into an ATM Equity Offering SM Sales Agreement (“New Sale Agreement”) with BofA Securities, Inc.
Stockholders’ Equity Shelf Registration Statement In May 2023, the Company entered into an ATM Equity Offering SM Sales Agreement (“Sale Agreement”) with BofA Securities, Inc.
As of December 31, 2023 , $ 150.0 million of common stock remained available for sale under the New Sale Agreement. In February 2024, the Company delivered written notice to BofA that it was suspending and terminating the prospectus related to the shares of its common stock issuable pursuant to the terms of the New Sale Agreement.
In February 2024, the Company delivered written notice to BofA that it was suspending and terminating the prospectus related to the shares of its common stock issuable pursuant to the terms of the Sale Agreement.
The preparation of the Company’s financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes.
Use of Estimates The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of the Company’s financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes.
The following tables summarize our available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): As of December 31, 2023 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S.
Notes to Financial Statements - (Continued) The following table summarizes our available-for-sale debt securities in an aggregate gross unrealized loss position at December 31, 2023, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands): As of December 31, 2023 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S.
Notes to Financial Statements - (Continued) Stock-Based Compensation Expense Stock-based compensation expense has been reported in the statements of operations and comprehensive loss as follows (in thousands): Year Ended December 31, 2023 2022 Research and development $ 7,873 $ 7,235 General and administrative 12,132 9,968 Total $ 20,005 $ 17,203 Unvested Stock Liabilities A summary of the Company’s unvested shares and unvested stock liabilities is as follows (in thousands, except share data): Number of Unvested Shares Weighted-Average Grant Date Fair Value Unvested Stock Liabilities Balance at December 31, 2022 68,406 $ 1.94 $ 169 Vested shares ( 58,087 ) $ 2.00 ( 149 ) Balance at December 31, 2023 10,319 $ 1.57 $ 20 Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following: December 31, 2023 2022 Common stock options outstanding 7,989,192 7,345,444 Shares available for issuance under the Plans 5,198,941 4,012,001 Shares available for issuance under the ESPP 1,142,750 816,478 Pre-funded common stock warrants 503,226 — Total 14,834,109 12,173,923 6.
Unvested Stock Liabilities A summary of the Company’s unvested shares and unvested stock liabilities is as follows (in thousands, except share data): Number of Unvested Shares Weighted-Average Grant Date Fair Value Unvested Stock Liabilities Balance at December 31, 2022 68,406 $ 1.94 $ 169 Vested shares ( 58,087 ) $ 2.00 ( 149 ) Balance at December 31, 2023 10,319 $ 1.57 20 Vested shares ( 10,319 ) $ 1.57 ( 20 ) Balance at December 31, 2024 — $ — $ — Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following: December 31, 2024 2023 2022 Common stock options outstanding 8,873,071 7,989,192 7,345,444 RSUs outstanding 341,847 — — Shares available for issuance under the Plans 5,131,660 5,198,941 4,012,001 Shares available for issuance under the ESPP 1,506,316 1,142,750 816,478 Pre-funded common stock warrants outstanding 2,676,804 503,226 — Total 18,529,698 14,834,109 12,173,923 5.
Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 125 Balance Sheets 126 Statements of Operations and Comprehensive Loss 127 Statements of Stockholders’ Equity 128 Statements of Cash Flows 129 Notes to Financial Statements 130 124 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Janux Therapeutics, Inc.
Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 110 Balance Sheets 112 Statements of Operations and Comprehensive Loss 113 Statements of Stockholders’ Equity 114 Statements of Cash Flows 115 Notes to Financial Statements 116 109 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Janux Therapeutics, Inc.
Treasury securities 71,300 71,300 — — U.S. agency bonds 167,103 — 167,103 — Asset-backed securities 5,055 — 5,055 — Corporate debt securities 1,999 — 1,999 — Commercial paper 79,366 — 79,366 — Total short-term investments 324,823 71,300 253,523 — Restricted cash: Money market account 816 816 — — Total restricted cash 816 816 — — Total assets measured at fair value on a recurring basis $ 340,390 $ 86,867 $ 253,523 $ — 131 Table of Contents Janux Therapeutics, Inc.
Treasury securities 71,300 71,300 — — U.S. agency bonds 167,103 — 167,103 — Asset-backed securities 5,055 — 5,055 — Corporate debt securities 1,999 — 1,999 — Commercial paper 79,366 — 79,366 — Total short-term investments 324,823 71,300 253,523 — Restricted cash: Money market account 816 816 — — Total restricted cash 816 816 — — Total assets measured at fair value on a recurring basis $ 340,390 $ 86,867 $ 253,523 $ — Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.
The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the financial statements and related disclosures. 2.
The standard is effective for the Company beginning in fiscal year 2025, with early adoption permitted. The Company does not expect to early adopt the new standard. The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the financial statements and related disclosures. 2.
A product or a service is distinct if both (i) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) the 135 Table of Contents Janux Therapeutics, Inc.
A product or a service is distinct if both (i) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) the Company’s promise to transfer the product or the service to the customer is separately identifiable from other promises in the contract.
Cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2023 was $ 2.8 million. Operating lease expense included in the measurement of lease liabilities for year ended December 31, 2022 was $ 2.8 million.
Operating lease expense included in the measurement of lease liabilities for years ended December 31, 2024 , 2023 and 2022 was $ 3.4 million, $ 3.4 million and $ 2.8 million, respectively.
A summary of the Company’s stock option activity under its Plans is as follows (in thousands, except share, per share data and years): Number of Outstanding Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Balance at December 31, 2022 7,345,444 $ 11.67 8.3 $ 29,806 Granted 2,019,450 $ 13.80 Exercised ( 253,545 ) $ 8.86 Forfeited or cancelled ( 1,122,157 ) $ 13.25 Balance at December 31, 2023 7,989,192 $ 12.08 7.8 $ 16,733 Vested and expected to vest at December 31, 2023 7,989,192 $ 12.08 7.8 $ 16,733 Exercisable at December 31, 2023 5,226,145 $ 9.89 7.3 $ 16,596 141 Table of Contents Janux Therapeutics, Inc.
Stock Options A summary of the Company’s stock option activity under its Plans is as follows (in thousands, except share, per share data and years): Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Balance at December 31, 2022 7,345,444 $ 11.67 8.3 $ 29,806 Granted 2,019,450 $ 13.80 Exercised ( 253,545 ) $ 8.86 Forfeited or cancelled ( 1,122,157 ) $ 13.25 Outstanding at December 31, 2023 7,989,192 $ 12.08 7.8 $ 16,733 Granted 2,359,363 $ 15.07 Exercised ( 1,152,192 ) $ 12.30 Forfeited or cancelled ( 323,292 ) $ 13.10 Outstanding at December 31, 2024 8,873,071 $ 12.81 7.2 $ 361,595 Vested and expected to vest at December 31, 2024 8,873,071 $ 12.81 7.2 $ 361,595 Exercisable at December 31, 2024 5,401,003 $ 11.21 6.6 $ 228,619 The weighted-average grant date fair value of option grants for the years ended December 31, 2024 , 2023 and 2022 was $ 11.30 , $ 10.02 and $ 12.35 , respectively.
The maximum term of options granted under the 2021 Plan is ten years and, in general, the options issued under the 2021 Plan vest over a four-year period from the vesting commencement date. The 2021 Plan does not permit early exercises. A total of 2,775,890 new shares of common stock were initially reserved for issuance under the 2021 Plan.
The maximum term of options granted under the 2021 Plan is ten years and, in general, the options issued under the 2021 Plan vest over a four-year period from the vesting commencement date. The 2021 Plan does not permit early exercises. Any future cancellations under the 2017 Plan will become available for future issuance under the 2021 Plan.
The price of common stock purchased under the ESPP is equal to 85 % of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase. A total o f 466,000 shares of common stock were approved to be initially reserved for issuance under the ESPP.
The price of common stock purchased under the ESPP is equal to 85 % of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase.
If a promise to transfer a product or a service is not separately identifiable from other promises in the contract, such promises should be combined into a single performance obligation. The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to a customer.
Each distinct promise to transfer a product or a service is a unit of accounting for revenue recognition. If a promise to transfer a product or a service is not separately identifiable from other promises in the contract, such promises should be combined into a single performance obligation.
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
In June 2021, employees began to enroll in the ESPP and the Company’s first offering period commenced. Stock-based compensation expense related to the ESPP was $ 0.9 million and $ 0.6 million for the years ended December 31, 2023 and 2022, respectively.
For the years ended December 31, 2024 , 2023 and 2022, stock-based compensation expense related to the ESPP was $ 0.8 million, $ 0.9 million and $ 0.6 million, respectively .
Bal ance Sheets (in thousands, except share and par value data) December 31, Assets 2023 2022 Current assets: Cash and cash equivalents $ 19,205 $ 51,426 Short-term investments 324,823 275,590 Prepaid expenses and other current assets 5,213 5,423 Total current assets 349,241 332,439 Restricted cash 816 816 Property and equipment, net 7,003 7,086 Operating lease right-of-use assets 20,838 22,279 Other long-term assets 2,509 1,390 Total assets $ 380,407 $ 364,010 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 2,424 $ 2,159 Accrued expenses 7,387 8,179 Current portion of deferred revenue 1,705 5,406 Current portion of operating lease liabilities 1,517 763 Total current liabilities 13,033 16,507 Deferred revenue, net of current portion — 2,221 Operating lease liabilities, net of current portion 23,025 24,542 Total liabilities 36,058 43,270 Commitments and contingencies (Note 3) Stockholders’ equity: Preferred stock, $ 0.001 par value; authorized shares – 10,000,000 at December 31, 2023 and 2022, respectively; no shares issued and outstanding at December 31, 2023 and 2022 — — Common stock, $ 0.001 par value; authorized shares – 200,000,000 at December 31, 2023 and 2022, respectively; issued shares – 46,262,759 and 41,684,666 at December 31, 2023 and 2022, respectively; outstanding shares – 46,252,440 and 41,616,260 at December 31, 2023 and 2022, respectively 46 42 Additional paid-in capital 512,401 432,703 Accumulated other comprehensive income (loss) 665 ( 1,535 ) Accumulated deficit ( 168,763 ) ( 110,470 ) Total stockholders’ equity 344,349 320,740 Total liabilities and stockholders’ equity $ 380,407 $ 364,010 See accompanying notes. 126 Janux Therapeutics, Inc.
Bal ance Sheets (in thousands, except share and par value data) December 31, Assets 2024 2023 Current assets: Cash and cash equivalents $ 430,605 $ 19,205 Short-term investments 594,568 324,823 Prepaid expenses and other current assets 8,493 5,213 Total current assets 1,033,666 349,241 Restricted cash 816 816 Property and equipment, net 4,864 7,003 Operating lease right-of-use assets 19,286 20,838 Other long-term assets 2,884 2,509 Total assets $ 1,061,516 $ 380,407 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 4,026 $ 2,424 Accrued expenses 11,684 7,387 Current portion of deferred revenue — 1,705 Current portion of operating lease liabilities 1,749 1,517 Total current liabilities 17,459 13,033 Operating lease liabilities, net of current portion 21,276 23,025 Total liabilities 38,735 36,058 Commitments and contingencies (Note 3) Stockholders’ equity: Preferred stock, $ 0.001 par value; authorized shares – 10,000,000 at December 31, 2024 and 2023, respectively; no shares issued and outstanding at December 31, 2024 and 2023 — — Common stock, $ 0.001 par value; authorized shares – 200,000,000 at December 31, 2024 and 2023, respectively; issued shares – 59,064,606 and 46,262,759 at December 31, 2024 and 2023, respectively; outstanding shares – 59,064,606 and 46,252,440 at December 31, 2024 and 2023, respectively 59 46 Additional paid-in capital 1,258,316 512,401 Accumulated other comprehensive income 2,163 665 Accumulated deficit ( 237,757 ) ( 168,763 ) Total stockholders’ equity 1,022,781 344,349 Total liabilities and stockholders’ equity $ 1,061,516 $ 380,407 See accompanying notes. 112 Table of Contents Janux Therapeutics, Inc.
For each distinct performance obligation, revenue is recognized when (or as) the Company transfers control of the product or the service applicable to such performance obligation. In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as deferred revenue until (or as) the Company satisfies such performance obligation.
Notes to Financial Statements - (Continued) In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as deferred revenue until (or as) the Company satisfies such performance obligation.
To determine the transaction price, the Company considers the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer. If a significant financing component exists, the transaction price is adjusted for the time value of money.
The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to a customer. To determine the transaction price, the Company considers the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer.

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